LONDON (Alliance News) - Some price comparison websites in the general insurance sector are failing to meet consumers? expectations and, in some cases, regulatory standards, the Financial Conduct Authority said Wednesday.
The UK regulator had undertook a review looking at 14 price comparison websites between December 2013 and April 2014.
In a statement, the FCA, which aims to protect consumers and ensure competition in financial services, said the websites did not always ensure that consumers were given the appropriate information to help them make informed decisions. By failing to provide clear information, the websites are increasing the risk that consumers may buy products without understanding key features, the FCA said.
"Price comparison websites have increased in popularity among consumers with an estimated one third of consumers buying their motor insurance policy through them. They provide an important service for millions of consumers bringing convenience and simplicity to buying financial products online," Clive Adamson, the FCA's director of supervision, said in a statement.
"However, our review found that they were not meeting our requirements in delivering fair and consistent outcomes for consumers. We also found, through our consumer research, that consumers had a number of misconceptions about the services they provided," Adamson added.
The supervision director said that the regulator expects price comparison websites to take on board the findings of the review.
The regulator found that price comparison websites did not make clear their role in the distribution of the product or the nature of service they provided. As an example, the FCA said that some consumers mistakenly believe 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.
According to the regulator, not all comparison sites that are part of a larger group of an insurer or broker disclose this potential conflict of interest, which is against FCA rules. However, it noted that there was no evidence to suggest that these firms used this relationship to their commercial advantage.
The regulator said that although some some price comparison websites had taken steps to comply with their regulatory obligations, they had failed to fully implement guidance given by the FCA's predecessor, the Financial Services Authority, in 2011.
The FCA said it has asked price comparison websites to take action on the specific areas identified where they are not meeting the required standards to ensure customers get a product that meets their needs.
Among UK listed companies offering price-comparison websites for insurance are Moneysupermarket.com Group PLC and Admiral Group PLC, which owns Confused.com.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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Admiral (ADM)
Moneysupermarket.Com (MONY)