The internet has proved both a blessing and a curse when it comes to shopping around for the best financial products. While consumers now have instant access to more information than ever before, this has also made it much harder to find exactly what you're after.
The solution finally arrived in the form of comparison sites, of which there has been an explosion over the past few years. More and more consumers in search of everything from insurance to cheaper utility bills now make sites such as moneysupermarket.com their first port of call.
There is no doubt that these sites have changed the market for the better. An increasing number of people are now regularly switching provider to make sure they're getting the best deal, and this has inevitably helped to drive prices down.
But while most comparison sites will go to great lengths to highlight their "independence", most are nothing of the sort. While they provide a useful service, and may well find you the best deal – many do not cover the whole market and all of the UK's main comparison sites are commercial organisations, who are under pressure to increase their profits.
The most common way for comparison sites to make money is to receive a commission when they help guide a customer to another website. Some providers also pay more so that customers can go directly from the comparison site into their application process.
However, it is increasingly common for these providers to gain undue prominence on the site. For example, if you're looking for a credit card on simplyswitch.com, you'll be directed to a page which displays three cards at the top, underneath the heading "Current best credit card deals". These are all companies which the site has commercial agreements with and, as the site's founder admits: "Trying to find the best deal is like trying to find the perfect man – it doesn't exist."
Darby defends the site saying that these cards are displayed for customers who want a "quick, cheap and easy" experience. For those who want to scour the market, Simplyswitch offers a search facility, which includes details of cards which the site has no commercial link with.
Uswitch is equally as bad on its personal loans page, where it has a simple comparison service that only includes providers with which it has a link to. Again, the full search is available, but it's another click away. Simeon Linstead of Uswitch says that the site gives prominence to providers it links to because its research shows that consumers want to be able to go directly through to the application process. "To offer a free service, you have to earn your income from somewhere," he adds. "But we're very focused on ensuring the customer gets treated fairly."
Another problem with many comparison sites is that you often won't get what you're quoted. If you're shopping for car insurance on moneysupermarket.com or one of several other sites, for example, you may get one quote online, and then find that after being called by the insurer, to answer a few extra questions, you are offered a better or worse rate. Richard Mason of moneysupermarket says that this is because its own motor insurance questionnaire is not as detailed as some of the insurers. However, other sites such as confused.com pride themselves on being able to offer customers the price that they are quoted on the website.
It's also worth noting that you won't get a quote on your home, motor or any other kind of insurance from Direct Line or Churchill – two of the country's biggest insurers – on any UK comparison site. This is because they have refuse to provide their data to the sites.
Emma Holyer of Direct Line, which has recently launched a marketing campaign urging consumers to shun comparison sites, says that this is because they've "never worked with middle men", and because they dislike the fact that many sites quote consumers the wrong price. However, Moneysupermarket's Mason has a different take: "Direct Line don't want to be on our site because their prices are not competitive."
You should also not assume that because a comparison site does a good job in one market, they will also be good in another. Moneysupermarket has just three pet insurers signed up to its pet insurance channel and does not include any of the others in its search.
And while confused.com may have a great motor insurance search engine, most of its other product lines are poor. If you're looking for a current account, it takes you to a table with just two banks. Jennifer Rose of Confused concedes that there is room for improvement across the industry: "Comparison sites are not perfect – it's an evolution."
If you've got the time or the inclination, the only way to ensure you're getting the best deal is to search a handful of comparison sites. When I looked for the best electricity and gas package across five different sites, four of them gave me different numbers for the amount they thought I could save by switching – even though they all claim to take their data from the same feed. Furthermore, two picked out Scottish Power as the cheapest and three picked out NPower. One even suggested I would be £68 a year worse off if I picked Scottish Power.
Simplyswitch's Darby explains that differences in the sites' questionnaires are usually to blame for any differences in quotes.
Florian Ritman of Unravelit.com warns that providers who do not have their own licence, such as EbiCo (which borrows Scottish & Southern's licence), may also not be included on some sites, even though they offer some of the lowest prices on the market.
Energy switching sites do at least have a voluntary code which most adhere to. This should ensure that you get a similar quote regardless of which site you go to. However, other parts of comparison sites are generally not regulated. The Association of British Insurers is looking at introducing a code for insurance sites – which would be a welcome development.
How the sites measure up
What can you compare? Utilities, heating cover, broadband, home & mobile phone, TV, car insurance, loans, credit cards, bank accounts.
Plus points? The site's utility switching services are easy to use and comprehensive.
Minus points? Providers with whom it has a commercial arrangement are not highlighted clearly enough on the credit card and loan pages.
Our verdict: One of the broadest ranges of product lines, but needs to make it clearer where it has commercial agreements with financial services providers. 7/10
What can you compare? It's easier to say what you can't compare: home phones.
Plus points? The site has chat forums where you can ask experts or users for help with your financial problems.
Minus points? Its pet insurance channel covers just three providers – hardly the whole of the market.
Our verdict: Moneysupermarket is the giant of the comparison sites, but it's not squeaky clean. Like some of its rivals, it could be better at explaining when it is comparing the whole of the market and when it's not. 8/10
What can you compare? Utilities, phones, mortgages, broadband, credit cards, car insurance.
Plus points? You can buy energy-saving items on the site to lower the cost of your energy bills even further.
Minus points? The site's main credit card page pushes providers with which the site has a commercial relationship.
Our verdict: Simplyswitch started out just doing energy, and it is still strongest in this area. Its link-up with comparethemarket.com for car insurance is useful and it has resisted growing too fast. 6/10
What can you compare? Utilities, broadband, insurance, phones, plus many other banking products.
Plus points? Its car insurance search engine is the most comprehensive, and you'll end up paying the same price as you are quoted.
Minus points? Aside from motor insurance, most of Confused's other channels are not great. They have poor choice and are commercially driven.
Our verdict: Confused should probably stick to what it's good at – motor insurance - and not bother with the rest until it's ready. 5/10
What can you compare? Utilities, broadband, phones, travel and home insurance, credit cards, loans.
Plus points? Unravelit makes most of its money from selling its technology to other companies, so its consumer website is a little less influenced by commercial deals.
Minus points? Having said that, its credit card channel guides you only to the cards with which it has direct links.
Our verdict: Unravelit site is still relatively low profile and not yet quite slick enough. But has great potential to cut itself out as truly impartial. 6/10Reuse content