Insurance comparison websites are failing consumers

 

Insurance comparison websites are failing consumers, the City watchdog warned this week.

The Financial Conduct Authority (FCA) accused sites of "failing to meet consumers' expectations of them" and said they did not always ensure that people were given the information they needed to help them make the right decision.

By failing to provide clear information, the FCA said, the websites are increasing the risk that consumers will buy products without understanding whether they are getting the right cover or level of excess, for instance. In particular, the focus is put on headline price and brand when consumers should be made more aware of crucial product features such as policy coverage and terms.

The watchdog noted several problems. For example, the sites did not make their role clear, leaving some users mistakenly believing that a certain policy offered the best quote. On top of that, some sites owned by an insurer or broker do not disclose that, which is against FCA rules.

Clive Adamson, the FCA's director of supervision, said: "Our research found that price-comparison websites are not meeting our requirements in delivering fair and consistent outcomes for consumers. We also found that consumers had a number of misconceptions about the services they provided. "It is important for them to understand that not all products are the same and the cheapest product may not always be the best."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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