Britain's growing number of financial comparison websites are misleading consumers, often failing to provide users with the cheapest insurance quotes or best value financial products, in spite of claims that they can save their customers thousands of pounds.
According to a study conducted by the consumer group Which? and research carried out by The Independent newspaper, the best quotes from different comparison sites can vary by hundreds of pounds, even when consumers enter exactly the same information into each site.
The best motor insurance quotes across four of the biggest sites, for example, differ by more than £250, while even comparisons of products such as credit cards and personal loans often return search results that differ significantly – costing consumers hundreds of pounds of additional interest if they are inadvertently guided to one of the more expensive products.
Which? says consumers must realise they cannot be sure they have found the best deal until they have run a search across a handful of comparison sites. "With such an array of financial products to choose from, it can be tempting to turn to a price comparison site to do the legwork for you," said Martyn Hocking, the editor of Which? Money. "But you might be very confused to find different sites can give you vastly different quotes and often don't give enough information for you to make an informed choice.
"You need to use two or three comparison sites and check directly with providers to get the best quote, and remember that cheapest isn't always best – it's a false economy if you don't get enough cover for your needs or have to pay a huge excess if you claim."
Comparison sites have come under fire from a number of consumer organisations and trade bodies over the past year, because of concerns that they make the process of buying financial products too simple. Policy exclusions are often not clearly pointed out to consumers who use the sites to buy insurance policies, while some sites have also faced allegations that they have given special treatment to the providers that pay them the most commission.
Earlier this year, the Financial Services Authority carried out a short investigation into financial comparison sites but resisted calls to regulate the sector. It is now conducting a further inquiry, the results of which are to be published in October.
The comparison sites dismissed the findings of the Which? report yesterday, claiming it was not comprehensive. "Accuracy is of paramount importance to us," said Stuart Glendinning, the managing director of moneysupermarket.com. "Moneysupermarket.com is the only price comparison website with a clear commitment to customers on how it will behave. Our customer promise makes it clear our aim is to compare more providers than any other site, to list every provider (and make clear which ones we don't list and why), that the price you see is the price you pay and that you won't get cheaper by going direct."
Hayley Parsons, the chief executive officer of Gocompare.com added: "There are various reasons why Which? may have found quotes differed from site to site. For example, some comparison sites don't compare as many insurers or products as we do, therefore the search results would be different. It's also worth pointing out that this research is nearly two months out of date and since then we've added even more insurers and products to our service and will be adding still more in the very near future."
The Independent has played a key role in raising standards across comparison sites during the past year, highlighting a number of examples of bad practice, and working with the sites to provide clearer information. Moneysupermarket.com used to boast that its site offered consumers the chance to compare "over 550 online private medical insurance policies" when it in fact only provided quotes from six companies. It has since removed the claim.
Uswitch also agreed to add a disclaimer to a credit card table entitled "our top deals", informing consumers those cards were only the best deals among those companies with which Uswitch has a commercial agreement.