James Daley: Help us clean up the comparison sites

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The Independent Online

Financial comparison websites have been getting away with murder over the past few years. They now account for more than half of all motor-insurance policy sales, and are selling an increasing proportion of many other financial products, but they remain completely unregulated.

Although they have admittedly helped millions of consumers to get a better deal on their utility bills and numerous financial services products, there is still an awful lot of bad practice that goes unpunished.

At the end of last month, however, the Financial Services Authority finally agreed to take a look at the industry after the insurance brokers' trade body (Biba) called for the sites to be regulated. The brokers – quite understandably – feel aggrieved that not only have these upstarts been busy stealing their business over the past few years, but they have managed it with a fraction of the paperwork.

However, there are also some serious concerns about consumer protection. As Biba's own research showed, many consumers are not clear on the differences between the policies they are offered on these sites and, in many cases, they are at risk of buying policies that do not really suit their needs. And they won't find out about it until it's too late – and a claim is turned down.

My personal problem with comparison sites is the amount of misleading and inaccurate information. While sites such as moneysupermarket.com and uswitch.com like to talk about their integrity and independence, the truth is that these are hard-nosed businesses under pressure to continue increasing their profits, by whatever means necessary.

Take a look at uSwitch's credit cards and loans pages, for example, which give you a list of "our top deals". Unsuspecting consumers could be forgiven for thinking that these were indeed the best deals on the site, when in fact they are simply the best deals with which these websites have commercial agreements. Carry out a full search and you're unlikely to find that their "top deals" come out on top. Or how about Moneysupermarket, which claims to offer you the chance to "compare over 550 online private medical insurance policies" and "over 100 car breakdown policies". In fact, you'll only find around six providers showing up in its medical insurance searches, and around eight on its car breakdown comparisons. Sure, you may be able to compare 550 policies, but if 100 of them are from the same provider, how much difference will there really be?

This kind of bad practice is rife. Moneysupermarket used to use the same trick on its pet insurance channel, but changed it after Save & Spend kept writing about it – which just goes to show that our pressure can make a difference.

And that's why we're starting a new campaign. As of today, you'll be able to find a new personal finance blog on the internet – Cash Crusader) – where we intend to keep highlighting all the bad practice we see on the comparison sites (and elsewhere in the financial services business). If you spot anything suspicious yourself, why not write a comment on the blog to let us know?

Until the FSA steps up to the task of regulating comparison sites itself, it's up to the rest of us to help keep them clean.

* I was impressed by the flood of passionate emails in defence of cheques last week (some of which we've printed below), and I concede that there are instances in which they can still be useful. Fear not; Save & Spend has no intention of campaigning for their extinction, and I doubt that it will happen any time soon.

What is more likely, however, is that the banks soon start to charge for cashing cheques – fees that we in the UK have been lucky not to have to pay so far. In most other countries, such charges are already commonplace.

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