If you’ve never seen those ads with that annoying bloke pretending to be an opera singer repeating the name of GoCompare.com ad infinitum you must have been living under a rock. Be thankful for that.
However, as those of us who have had our viewing pleasure disrupted by the fake tenor are all too aware, he exhorts the world to utilise GoCompare’s internet price comparison service, holding out the promise of super-duper savings.
What he doesn’t say (although its probably buried away in the small print somewhere) is that the insurance price comparison site he promotes is actually half owned by an insurance company. It’s now about to be fully owned by said insurance company: esure. Subject to regulatory approval.
Esure’s premium for buying the half of the site it doesn’t own is £95m, and the £44m of that which founder Hayley Parsons is reportedly going to pocket will ensure that she never has to use GoCompare.com again. She’ll have more than enough to pay for the services of several private bankers to do the job for her.
The ordinary consumer lacks that option and so has little choice but to wade through the treacle that these comparison sites serve up – that is if they don’t want to spend hours on the phone searching out a good deal.
I asked esure’s PR company about the obvious problem with having an insurer owning a comparison website, but they were too busy comparing insurance prices to respond to the message I left. So let’s check out chief executive Stuart Vann’s statement on the matter instead.
In it he is at pains to stress that GoCompare will continue to operate on “a strictly independent basis regarding partnerships and comparison services”. That’s nice. But, then, you’d expect him to say something like that when he’s sitting right in the middle of a huge, but potentially very lucrative, conflict of interest. A crocodile selling fresh vegetables to wildebeest at the riverside is hardly going to discuss its own dining plans.
The Financial Conduct Authority has already fretted about the price comparison sector, although not to the extent of accusing insurers of using such sites to push their own products.
What it did find, however, was that sites didn’t always disclose that they were part-owned or fully owned by insurers; frequently left their customers confused about the sort of service they were getting; and had failed to implement guidance issued way back in 2011.
So there’s clearly a problem here, in an industry in which there is an enormous power imbalance between consumer and provider, in favour of the latter.
You’d think, given all that, that the regulatory agencies might see grounds for an intervention here.
And if they don’t, if they refuse to act (count on it), perhaps Andrew Tyrie and his Treasury Select Committee might like to give some thought to forcing their hands. It isn’t only in banking where a host of dubious practices lurk below an apparently polished surface.Reuse content