Price comparison site probe call

Posted on 22 January 2008

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The Financial Services Authority (FSA) has been asked by the UK's leading independent insurance body to review the regulation of comparison websites.

The British Insurance Brokers' Association (BIBA) has called on the FSA to update the current rules, which were finalised before the advent of price comparison sites.

In research commissioned by BIBA, 84% of customers said they found that the details of insurance policies included in comparisons could be confusing. Only 6% said that the details of what each policy does and does not cover are fully explained.

The study also found that a third of insurance buyers are unaware that many price comparison sites make assumptions when providing quotations, which BIBA says could lead to customers buying inappropriate policies.

"The current FSA rules were written prior to the growth in aggregator sites," said BIBA chief executive, Eric Galbraith. "I believe the regulator should now look again at developing more appropriate regulations, to ensure that consumers are being afforded suitable protections."

"There are still too many people logging on, and making a decision solely based on the price of a policy," he added.

The FSA is yet to officially confirm that it will act, but BBC News reports that an FSA spokesperson said: "In light of the new research, we will undertake a further review of the issues.

"After that has been done we will consider whether we should take any regulatory action."

Category: Personal finance, Regulation

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