FSA to investigate comparison sites

[Legal Beagles]

The Financial Services Authority is to launch an investigation into the fast-growing comparison site market, in response to renewed calls from the insurance industry for the FSA to begin regulating the sector.


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[Amethyst]

Re: FSA to investigate comparison sites

FSA to investigate comparison sites

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By James Daley, Personal Finance Editor
Tuesday, 22 January 2008

The Financial Services Authority is to launch an investigation into the fast-growing comparison site market, in response to renewed calls from the insurance industry for the FSA to begin regulating the sector.
The British Insurance Brokers' Association (Biba) yesterday became the latest group to raise questions about protection for consumers who use comparison sites, unveiling new research that found that more than half of the customers of insurance comparison sites do not fully understand the difference between the policies they are comparing.
Comparison sites such as Moneysupermarket.com and Uswitch.com have exploded in popularity over the past few years, and are now believed to account for more than 50 per cent of motor insurance policy sales, as well as a growing proportion of home policies. Consumers are also increasingly using the sites to shop for loans, credit cards, savings accounts and home utility providers.
"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," said Biba's chief executive, Eric Galbraith. "Insurance products are complex, and it is important to understand the cover they provide. Brokers are professionally trained to help."
A spokesman for the FSA said that although the regulator had considered comparison sites before, it would now re-examine the issue in light of the latest information to decide whether it should intervene in the market.
Moneysupermarket.com res-ponded to the news, describing Biba's call as "the death rattle of a dying sector". "Consumers know that if you go to a broker you'll get a quote that covers a few broker-based insurers but excludes highly competitive direct insurers like Swiftcover," said Richard Mason of Moneysupermarket.com.








hmmm sounds to me like the insurers don't like the competition and want the FSA to make the market more complex

[righty]

Re: FSA to investigate comparison sites

Most comparison sites are a con.

Most are 'owned' by the insurance or utilitiy companies who's products they 'search'. It's been alleged that some fix their prices in order to obtain certain classes of motorist/consumer

In addition mainly in the case of insurers it's been alleged that they manipulate their premiums almost weekly so the 'comparison' site can claim to offer cover to every type of driver young or old. They adjust their premiums so that some weeks one company is vastly more expensive than another for the same cover then another week later that same site is cheaper. This helps to spread the burden of risk.

It's also alleged that contrary to the claim it's to combat fraud the real reason why your quote is recorded & your given a reference no. is so they don't make the mistake of offering you a lower rate from the same source