FSA still has questions over insurance comparison sites

Published on Wednesday 12 November 2008 20:26

A SMALL number of insurance comparison websites continue to mislead customers despite improvements in recent months, the City watchdog said yesterday.

Publishing its review of comparison sites, the Financial Services Authority (FSA) found that a number of comparison sites still provide insufficient information about the level of excesses on policies.

A minority also produce adverts that could give consumers misleading expectations of a firm's market coverage and the amount they could save on premiums.

Some services make assumptions about consumers in order to generate quotes, but without making that clear in the results, the FSA said.

However, the latest study of the market, following an initial review published in May, found that most sites had "made significant improvements" and were consistently providing clear and fair information.

Dan Waters, the FSA's director of retail policy and conduct risk, said the watchdog was pleased that the 17 firms involved in the review had made improvements to their websites and processes. "But it is imperative that all comparison websites provide clear information so that consumers can make informed decisions," Waters added. "We have contacted all websites involved in our review, to set out our findings and the standards we expect. Where needed, we are requiring firms to take prompt action to address our concerns."

Angela Knight, chief executive of the British Bankers' Association, said the onus remained on consumers using comparison sites to ensure they buy the appropriate cover.

Knight said: "The more sites you visit, the better choice you're likely to find. But people still need to check carefully they've got the right cover and not just the cheapest quote so they can be sure they won't be left up the creek without a paddle."

The insurance comparison site market has experienced massive growth in recent years, accounting for a quarter of all private motor insurance sales in 2007, the FSA said.