Price comparison websites appear to be a valuable service for consumers – helping us find cheaper deals on a range of financial products. However, according to a consumer group, the information they provide is not always fair.
Consumer association Which? has placed comparison websites under the microscope and called for them to be regulated after suggesting that some are offering misleading quotes on insurance policies and could ultimately cause consumers to spend more money than is necessary.
What’s the problem?
According to the investigation, initial prices on comparison websites appear cheap because some of the websites are pre-selecting certain options. Despite offering some comparison services on its own website, Which? believes that they do not always operate in the customer’s favour – and in some cases they are not clear.
Martyn Hocking, the website’s editor, commented that it often looks like you are getting an attractive, cheap quote on a comparison website. However, its research suggests that when you click through to buy insurance, you may get a far higher price from the insurer. One of the reasons is that some car insurance searches pre-select boxes to make a quote look cheaper – and this figure rises when the search is personalised with the insurer. Among the typical assumptions that are made is that your car is parked on a drive or in a locked garage, which reduces the risk of theft.
As part of the research, Which? asked one of its team to use a false name and gather car insurance quotes from 11 comparison websites. She found she was offered prices that ranged from £310.28 up to £660.20. It was also commented that comparison websites give the impression that there is no need to go anywhere else – however, they do not compare the whole of the market. Some of these concerns have been echoed by the Financial Services Authority (FSA) which is supervising the market.
Are they worth using?
One thing is certain about comparison websites – they are a convenient method of saving time and money. While there is an argument that says that you would be better to contact each insurer individually, few of us have the time to do so – and a comparison website that can compare prices from more than 100 insurers with a single search can be well worth using.