Millions of people who use price comparison websites to save money on car and home insurance could be being misled, a watchdog warned yesterday.
The Financial Conduct Authority is looking into potential conflicts of interest where sites are paid by companies to feature their products or even owned by insurers themselves.
The FCA’s David Cross said: “If insurers happen to own a particular price comparison website there is a concern that could create a conflict of interest whereby their products are promoted over others.
“When someone searches for something, are they necessarily getting the best deal for them, or are they just getting the deal the website wants to give them?”
The review of 14 popular sites will question company heads about “whether the customer or profit is really at the heart of the business model”.
The review will also survey site users to find out how they browse.
In addition, it will look into whether consumers may be being misled into purchasing products or add-ons which do not meet their needs.
Clive Adamson, the FCA’s director of supervision, said: “We want to get to a place where consumers that use these sites buy with the confidence knowing that they have all the relevant facts.”
More than 20 million people are thought to have used a price comparison website in a bid to cut insurance costs.
In some cases people who thought they had secured a good deal later discovered they were not as comprehensively covered as they thought.
In May, a survey by consumer champions Which? found only a third (32%) trust price comparison sites to find the best price.
Customer satisfaction with the sites is also very low.
In the same month Which? compared five like-for-like car insurance quotes on 10 comparison sites.
It found quotes for insuring a 22-year-old driver living in a high-risk area differed by more than £1,500 when looking at the cheapest quotes on each site.
Last night Richard Lloyd, executive director of Which?, welcomed the FCA review.
He said: “We found these sites claim to do all of the work for you but they don’t always guarantee people the best deal or even the right one.”
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