Insurance price comparison sites failing, says FCA
Far from helping consumers to choose insurance policies, price comparison sites may be confusing them further, according to the regulator.
The Financial Conduct Authority (FCA) says some sites are failing consumers' expectations, while a number are breaking the rules.
The FCA said consumers were not being given the right information to help them make decisions.
Comparison sites relied that they were offering helpful information to users.
Of 14 sites reviewed, many were accused of being "unclear" by the FCA, and some were failing regulatory standards.
The FCA said comparison sites tend to focus too much on price, without telling consumers about other policy details - such as the excess they might have to pay in the event of a claim.
It said that some consumers mistakenly believed that the price comparison website had provided them with quotes on the best policy for their individual needs and had assessed the suitability of the policy for them.
Conflict of interest
In addition, some sites which are owned by an insurance company or an insurance broker, were failing to flag up a potential conflict of interest.
This is against FCA regulations.
Small print on the Gocompare.com website informs customers that it is 50% owned by Esure, an insurance company.
Those who read right to the bottom of another site, Confused.com, will see that it is owned by Admiral Insurance.
"However, we are a completely separate business, and pride ourselves on impartiality and independence," according to the website.
Tesco Compare - whose owner, Tesco, sells insurance directly - has not yet commented on the FCA report.
However, the FCA found no evidence that such firms had profited as a result of their potentially conflicting ownership.
The FCA said that one-third of consumers - more than eight million people - buy their motor insurance through price comparison websites, but many people were not getting the service they expected.
"Our review found that they were not meeting our requirements in delivering fair and consistent outcomes for consumers," said Clive Adamson, the FCA's director of supervision.
However some of the websites which the FCA reviewed explained that they gave customers more than a simple price comparison.
"Gocompare.com has always strived to show its customers the full story when it comes to insurance comparison, and was the first comparison site to enable its customers to compare the levels of cover, as well as price," said Hayley Parsons, the founder and chief executive of Gocompare.
"MoneySuperMarket is built to make it easy for customers to find the right policies and products at the best possible price, with the overall aim of helping every household make the most of its money," said Peter Plumb, the chief executive of MoneySuperMarket.
The FCA said it expects the price comparison websites to "take on board the findings".
The FCA will be providing individual feedback to the websites involved, and will be asking them to take action on specific areas where they are failing to meet its expectations.