Customers not getting the full picture on comparison sites
Price comparison sites covering car and household insurance are failing to give consumers a true picture of the products they buy, the City regulator has said.
The Financial Conduct Authority (FCA) accused some sites of focusing on the price of a policy without clearly explaining "crucial features" such as levels of cover and the excess a customer might have to pay in the event of a claim.
It has asked the industry to take action on the specific areas identified in the review and urged consumers to consider that not all products are the same and the cheapest product may not always be the best for their needs.
The FCA reviewed 14 websites between December and April, but did not identify which ones. It said an estimated one third of consumers buy their motor insurance policy through such sites.
By failing to provide clear information, the FCA said the websites are increasing the risk that consumers may buy products without understanding key features, such as level of cover or excess levels, and purely focus on the price.
A few websites did provide detailed information about the policies they reviewed, but the level of clarity in the market "varied significantly".
The regulator added that some sites were part of a larger insurance group or broker but did not disclose potential conflicts of interest, which is against its rules.
The watchdog concluded that consumers were not being given the right information to help them make decisions.
FCA director of supervision Clive Adamson said an estimated one third of consumers buy their motor insurance policy through comparison websites.
"However, our review found that they were not meeting our requirements in delivering fair and consistent outcomes for consumers," he said.