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Price comparison sites to face more scrutiny over transparency

Price comparison websites are to face deeper scrutiny around their transparency as part of an ongoing investigation by the competition watchdog.

The Competition and Markets Authority (CMA) said it had found four areas "of possible concern" in the first stage of its review of the sites, saying it would now be focusing on their transparency around market coverage and treatment of personal data.

The CMA's update, which also identified "certain practices and contractual arrangements that could limit healthy competition" between the sites, the way they are regulated and whether their benefits could be improved if suppliers make more information available, comes as price comparison site uSwitch defended its service over reports that consumers were not being shown the best deals.

The company said it was testing its website in line with regulator proposals after a report said the cheapest prices were initially hidden in searches.

According to The Sun, consumers were shown deals from companies that had paid uSwitch for promotion, with the best deals only revealed when a box was ticked on the search page.

A uSwitch spokesman said: "We are continually testing our website to make sure we provide the most straightforward comparison journey.

"This test is in line with Ofgem's current proposals for the Confidence Code. Throughout the trial all customers have been able to easily see all energy deals available on the market with one click.

"Our mission is to help consumers save money on their bills and last year we saved them over £320 million on their energy bills alone."

The CMA has also released survey results that found 84% of people looking for car insurance in the past year used a comparison site, as did 67% of those looking for energy and 52% for broadband.

However, the poll found that just 11% of recent users believed that sites covered all suppliers.

The watchdog launched its review of price comparison websites in September to investigate public awareness of how they earn their money and the level to which they actually benefit consumers.

At the time, the CMA said that while price comparison websites had ultimately "helped to inject significant competition into a number of markets", it noted "concerns about certain issues, including whether consumers can trust the information that's available".

It is focusing on comparison websites for car insurance, utilities and bank accounts, following on from its previous investigations into individual sectors and concerns over whether sites promote certain deals higher than others in their search rankings.

Comparison sites are required to comply with a set of rules introduced by Ofgem in 2014 to receive accreditation.

The regulator says the code insists its members follow key principles that provide reassurance to consumers about the "independence, transparency, accuracy and reliability of the service".

CMA acting chief executive Andrea Coscelli said: "Our work so far suggests that digital tools like price comparison websites generally work well for consumers, who really value the service they provide.

"However, our report suggests that improvements may be necessary to help more people get even better deals.

"Among the areas we wish to consider further are what can be done to increase confidence among consumers and how to improve competition, regulation and transparency in the sector.

"We are now seeking further views on these issues as part of our wide-ranging market study."

The final report will be published by September 28.

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