FCA Warning: Price Comparison Websites 'Not Fair and Consistent'

Unclear information on insurance price comparison websites could have led to households purchasing the wrong type of cover, says the Financial Conduct Authority (FCA).

The financial watchdog reviewed 14 sites, which collectively account for 90% of price comparison market, and found that they were prioritising money over cover, and that they didn't provide appropriate information to help consumers make the best decision.

"This is particularly important as FCA is concerned that consumers' focus on headline price and brand when using PCWs could distract from crucial product features such as policy coverage and terms," said the FCA.

By failing to outline the specific details, the regulator says that consumers could be burdened with insufficient cover, which could see them having to cough up more in the long-run.

Clive Adamson, director of supervision at the regulator, said: "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.

"We expect price comparison websites to take on board the findings of the review. It is also important for consumers to understand that not all products are the same and the cheapest product may not always be the best for their needs."

The FCA says that it has contacted the websites that were scrutinised, and asked them to make changes to their websites so that they sufficiently comply with proper regulation.

This includes that, if the price comparison website is part of a larger group or insurance company, it needs to make that information clear as it could be deemed a conflict of interest, which is against FCA rules.