This weekend sees the launch of the Cash Crusader's campaign to keep the financial comparison sites honest. While they now account for more than half of all motor insurance policy sales, and are selling an increasing proportion of many other financial products, they still remain completely unregulated. And while they have admittedly helped millions of consumers to get a better deal on their utility bills and insurance, there is still an awful lot of bad practice which goes unpunished.
For me, the biggest problem with comparison sites is the sheer volume of misleading and inaccurate information on their pages. While sites such as moneysupermarket.com and uswitch.com like to talk about their integrity and independence, the truth is that these are hard-nosed businesses, under pressure to continue increasing their profits, often by whatever means necessary.
Here are some examples - which I'll add to over the coming weeks, as and when I come across other poor behaviour.
USWITCH.COM
Take a look at uswitch’s credit cards and loans pages, which proudly give you a list of their "top deals". Unsuspecting consumers could be forgiven for thinking that these were indeed the best deals on the site, when in fact, they are simply the best deals amongst providers that the website has a commercial agreement. Carry out a full search and you’re unlikely to find that these “top deals” actually come out on top.
Nowhere under the tables does it explain how these deals are selected. And the option to do a full search is a much smaller feature on the page.
Elsewhere on the Uswitch site, you'll find that whenever you carry out a search, you're asked whether you want a list of products that you can apply for on the site or not. This is rather mischievously worded. If you select "No", you'll still see the products that you can apply for directly, as well as the ones you can't.
MONEYSUPERMARKET.COM
Moneysupermarket claims to offer you the chance to “compare over 550 online private medical insurance policies” and “over 100 car breakdown policies”. In fact, you’ll only find around six providers showing up in its medical insurance searches, and around eight on its car breakdown comparisons. Sure, you may be able to compare 550 policies, but if 100 of them are from the same provider, how much difference will there really be?
Moneysupermarket used to use the same trick on its pet insurance channel, but changed it after we at The Independent kept writing about it – which just goes to show, our pressure can make a difference.
OTHER REGULAR TRICKS TO WATCH OUT FOR
+ Comparison sites rarely cover the whole market - even if they like to suggest they do.
+ The price you get quoted on insurance products is not always the
price you will get. Once you click on the button to purchase a product,
you may be put through the whole underwriting process again - and end
up with a more expensive premium.
+ Have you read the exclusions on your insurance policy? The comparison
sites won't go out of their way to warn you what you are and are not
covered for. They get paid per sale. Most people don't realise they've
bought an unsuitable policy until they make a claim and are rejected.
If you come across any other bad behaviour on the comparison sites, let us know by posting a comment on this blog, or by sending us an email. Until the FSA steps up to the task of regulating comparison sites itself, it’s up to the rest of us to help keep them clean.
Some very interesting points - as consumers, comparison sites have made comparing financial products far simpler, but you're right pointing out that we still need to know exactly what we're comparing, and whether the policy is right for us in the first place.
I look forward to reading your future posts on the subject.
Posted by: Money Watch | Wednesday, 12 March 2008 at 11:53 PM
I've just been reading through a number of articles about comparrison sites. With such extreme competition (I've just counted 15 differnt comparrison sites regarding switching ultility supplier). How can they all be making money? I presume to companies pay a royalty for consumers acquired. However that surely only takes care of the small % of consumers who are likely to switch based on price. The vast majority of the general public do not always apply this logic when purchasing or retaining a product or service.
Posted by: David Watson | Thursday, 08 May 2008 at 07:15 PM
Uswitch are offering a free case of virgin wine worth £40 if you use their site to switch electricity. Virgin don't do a £40 case of wine. At the moment their cheepest case is £53.88and they don't do half cases.To claim your wine you have to spend £80 then claim your £40 pound off. But the least you can spend is £107.76 plus £5.99 postage. Total £113.75 LESS your £40 voucher = 73.75. Doesn't sound like a FREE case of wine now does it?
Posted by: Mr Alan H Audley | Friday, 27 March 2009 at 11:49 PM