Price comparison web sites have come under fire from the Financial Conduct Authority (FCA) for failing to offer customers a good deal and breaching standards.
The main issue, said the FCA, was price comparison web sites often returned enough information for customers to make informed decisions.
Expats regularly use price comparison web sites to find the best offshore savings rates, life protection and private medical insurance.
The investigation found price comparison sites were too focussed on brand and price rather than the quality of products and their suitability for customers, while ignoring the features and conditions of different policies and products.
Conflict of interest
The FCA also criticised the sites for:
- Failing to explain their role in the distribution of products – often consumers believed the web site quoted the best policy for their needs when this was not the case
- Comparison sites owned by insurers or brokers often neglected to explain their links to third parties, which could lead to the risk of a conflict of interest
- Many price comparison web sites did not observe FCA guidelines on best practice
FCA director of supervision Clive Adamson said: “Price comparison web sites are a gateway to buying insurance and other financial products for millions of customers.”
“However, the investigation revealed they do not deliver a fair and consistent outcome for customers and customers held a number of misconceptions about the way the services operated.
“We are asking price comparison web sites to take our findings on board and to make a number of changes in favour of their customers.”
Warnings about bogus advisers
The FCA has also issued these warnings about bogus firms posing as regulated financial advisers:
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.
Reporting a suspected bogus adviser