Price comparison websites have changed the ways consumers search for products and services and companies design, price and distribute them. The main advantages are that people can save time, process more information and have more choice.
The British Financial Conduct Authority (FCA) is going to conduct a review of 14 price comparison websites and the potential risks involved in the field of insurances for daily needs like motor, home and travel insurance products. The aim of the review is to ensure that consumers can make easy, informed and balanced decisions about buying general insurances.
The British consumer organisation Which? welcomed the FCA decision. Which? conducted a risk review in early 2013 indicating that price comparison websites often use automated comparison algorithms to quote for millions of people at low cost that might not be able to properly scrutinise their own practices. A follow-up survey of 6,038 of their own members revealed that only a third (32 %) trust price comparison sites to find the best price. “We want comparison sites to treat customers fairly by being upfront that they don't cover the whole market and more transparent about what is and isn't included in the policies they're selling.” commented Which?-executive director Richard Lloyd.
The FCA will publish the results of the review and what it expects from price comparison websites next year.
Source: FCA and Which