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FSA Focus on Price Comparison Websites |
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 The FSA (Financial Services Authority) has had a change of heart over calls to regulate price comparison websites such as moneysupermarket.com and confused.com.
The turnaround comes following findings from BIBA (The British Insurance Brokers' Association) that the majority of these websites' users have found the information given misleading.
BIBA reports that a mere six per cent of users found insurance policy details to be sufficiently comprehensive in terms of what they do and don't cover.
A further 84 per cent admitted to being confused by the policy details presented by such sites, with a third unaware of the assumptions aggregators make in order to produce their comparison tables.
The upshot of this is that users could opt for a policy at a price that is not appropriate to their circumstances and then end up paying more.
BIBA Chief Executive Eric Galbraith believes it's time the FSA did something about it: "The current FSA rules were written prior to the growth in aggregator sites.
"I believe the regulator should now look again at developing more appropriate regulations, to ensure that consumers are being afforded suitable protections.
"There are still too many people logging on, and making a decision solely based on the price of a policy, rather than the protections it offers them and potentially buying an inappropriate policy.
"Insurance products are complex, and it is important to understand the cover they provide. Brokers are professionally trained to help. Aggregators and technology are developing rapidly and consumers must be sold the right policy."
Comparison Sites Welcome Transparency
While the FSA has agreed to consider BIBA's findings and possibly review its stance on regulating such sites, those in the possible firing line are standing strong.
Debra Williams, managing director of price comparison service www.confused.com, supports the move for FSA regulation, adding:
"It is imperative that customers are provided with a fair and transparent service, and unlike other comparison sites, www.confused.com diffuses some of the opaqueness by providing quotes not estimates and, whenever possible, like-for-like comparisons.
"Employing detailed questions to encourage open and honest responses, as opposed to basing quotations on 'assumptions', is the key to receiving an accurate quotation and, in turn, purchasing a tailored policy."
Meanwhile James Harrison, CEO of Insurancewide.com, commented:
"With all due respect, BIBA seems a little behind on this issue. We all face the challenge to provide our customers with comprehensive but very clear, digestible information about all the factors affecting policy cover and price and we are working hard to be able to standardize the way people make comparisons.
"The insurance comparison websites are already in discussions with the ABI with a view to producing guidance notes on the responsibilities of comparison websites and insurers in the context of meeting their Treating Customers Fairly requirements.
"The FSA is fully aware of this and is supportive of our efforts." |
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