Insurance comparison sites misleading consumers

The Financial Services Authority (FSA) has revealed that some insurance comparison sites are providing incorrect or out-of-date information.

An investigation of insurance comparison websites found that although all the sites were properly authorised, there was mixed evidence in the clarity, fairness and accuracy of information given to customers.

The industry is growing fast and the amount of comparison websites has escalated over the last few years, as more people use them to find a better deal on a range of financial services.

Last year, insurance comparison sites generated approximately 30 million private motor insurance quotes.

The FSA found cases when compulsory excess levels were excluded from the price, or incorrect.

Warnings were issued to consumers to consider other factors than price, but with little follow-up information.

Furthermore, quotes differed from the amount actually charged by a broker or insurer.

British Insurance Brokers’ Association (Biba) was in favour of the review after its own assessment stated that 84% of people using insurance comparison websites thought the details given on insurance policies could be confusing.

Steve White of Biba said this is a great start but the FSA has further to go. Like brokers, comparison sites should guarantee their quotes.

We are pleased that the FSA is calling for comparison sites to give more information to consumers, concluded Mr White.

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