Insurance comparison sites warned to play fair

The Financial Services authorization (FSA) has warned insurance comparing websites to comply with its good pattern rules, or face a crackdown by the city regulator.

As the insurance comparison industry has expanded in recent years, the FSA has carried out a fresh reappraisal of the sector. The reappraisal focused on 17 insurance comparison websites and strived to ensure that all are providing the consumer with fair and accurate information.

According to this latest review, insurance comparison websites accounted for about 25 per cent of all buck private car insurance sold in 2007. And, due to their large insurance market share, the FSA, whose aim is to protect the consumer, felt a pattern review was required.

The reappraisal found that all 17 of the websites investigated were suitably authorised by the FSA, nevertheless, "there was mixed grounds in terms of the lucidity, fairness and truth of the info given to client."

In its study, the FSA focused on several areas highlight fairness and truth, including whether consumers are encouraged to consider features other than price and whether they are clear on the level of surplus applied to different insurance policies.

In response to inconsistent good pattern, the FSA has issued examples of good and bad pattern to ensure that comparing websites comply in the hereafter. It also urged such websites to perpetually review their sites and make sure that their info is correct.

If these measurement are not taken, the FSA warned that it would perform a series of 'thematic' firm visits to test whether individual firms are meeting its outlook. Ed Harley, the FSA's head of financial promotions, said:

"We welcome innovation and competition in the quickly expanding insurance comparison website market. Nevertheless, we are keen that the marketplace develops in a way that ensures customers are treated fairly, and expect comparison sites to provide information that is clear, fair and not misleading."

Commenting on the review, director of Fairinvestment.co.uk, James Caldwell, said: "It is reassuring to know that the FSA are keeping an eye on the steadily increasing number of insurance comparison sites. We believe that the fairness and accuracy of the information we provide to consumers is paramount and are keen for the FSA to enforce this in all comparison websites."

©Fair Investment Company Ltd