The Financial Services Authority has warned insurance comparison websites against “misleading” consumers and to provide clear and fair information. It follows a review of 17 insurance comparison sites by the financial services regulator.
The FSA says that the review showed good and bad practice, with mixed evidence in terms of the clarity, fairness and accuracy of information given to customers.
FSA head of financial promotions Ed Harley says that the regulator welcomes innovation and competition in the “rapidly expanding insurance comparison website market” but that the market must develop in a way that ensures customers are treated fairly.
“Consumers should shop around for the best deal, but it is important that they compare what’s covered by a policy, and not just focus on the price,” he says.
The review covered areas such as whether consumers encouraged to consider features other than price before purchasing products; clarity of the levels of success that apply to insurance policies; and whether firms had appropriate systems and controls in place for ensuring that key product features included within insurers’ policies are correctly listed and that they correctly pass consumer information to brokers and insurers.
The review follows FSA reviews in 2006 and 2007, which concluded that no immediate action, other than to follow the development of the market, was required.
Last month the British Insurance Brokers Association said that general price comparison sites needed a separate regulator to ensure they were not misleading consumers.