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Calls to regulate price comparison websites

The consumer group, Which?, have called for price comparison sites to be regulated after suggesting that they do not always operate in favour of the consumer.

Websites such as Moneysupermarket.com, Go Compare and even Which? offer price comparison services to consumers for a whole range of products, from insurance and loans to telephone and energy prices.

However, a recent investigation conducted by Which? has suggested that the sites are not always fair or clear. Prices can be misleading and initially appear cheap, but turn out to be more expensive.

When dealing with insurance, often the price comparison service will pre-select some purchasing options for the consumer, making the quote look cheap. But when the customer goes to the insurer for the quote with the correct circumstances that apply to them, the price can be far higher.

For example, when looking for car insurance, the price comparison site may make the assumption that your car is always parked on the drive. If it is in fact always parked on the street, this can drastically affect the price of the insurance. Some of the quotes also automatically included optional extras such as legal cover or a courtesy car, thus altering the price.

A researcher for Which? investigated 11 price comparison sites using a false name. They put the same details into a car insurance price search, but the quotes that came back ranged from £310.28 to £660.20, which the consumer group believe is down to the comparison site making assumptions about the customer.

Furthermore, Which? pointed out that the comparison sites give customers the impression that they do not need to look anywhere else for a better quote. The research indicated that for some insurance products, the comparison sites only covered part of the market. None of the 11 sites in the investigation covered more than a third of the home insurance and travel insurance markets. Although they did indicate that the market coverage for credit cards and savings
accounts was much more comprehensive.

Which? went on to ask its members to rate the 11 comparison sites for customer satisfaction.

Over 9,000 Which? Members rated moneyfacts.co.uk the highest, with a score of only 44%.

Overall, satisfaction with price comparison sites have dropped from 46% to 42% in the last year, according to their survey.

Richard Lloyd from Which? said: “Price comparison sites claim to do all of the work for you, but our research found if you want to get the best deal you still need to shop around or it could cost you hundreds of pounds. Going to the insurer directly may also give you a better quote. We want to see tougher regulation and monitoring of price comparison sites to make sure they treat customers fairly and transparently.”

The Financial Service Authority have also indicated that they have some concerns over the price comparison website market. They have previously published guidance for firms selling insurance through price comparison sites and indicated that their supervision of the market is still ongoing.