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 has warned.
In a thematic review published today, the FCA looked at 14 price comparison websites, covering private motor, home and travel insurance. It found that the websites did not always give consumers the appropriate information to help them make informed decisions.
The FCA said it was worried that consumers' focus on headline prices and brand when using price comparison websites could distract them from crucial product information such as policy coverage and terms.
It warned that, by failing to provide clear information, the websites were increasing the risk that consumers might buy products without understanding key features such as the level of cover or excess levels because they only focused on the price.
FCA director of supervision Clive Adamson 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.
'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.'
Also, against FCA rules, the regulator found that price comparison websites failed to make it obvious what their role in the distribution of the insurance product or the nature of the service provided was. For instance, the FCA highlighted that some consumers believed that the price comparison websites had provided them with advice or guidance.
Despite this, the FCA found no evidence that these firms used this relationship to their commercial advantage.
The regulator has asked websites to take action on areas where they are not meeting the required standards to ensure customers get a product that meets their needs.