Websites that allow consumers to compare prices for insurance policies and other common services could be investigated by the Financial Conduct Agency. The FCA claims that it will review 14 price comparison websites (PCWs) in order to assess whether consumers are being directed towards unreliable insurance policies.
The agency believes that consumers may be being directed towards policies that are unlikely to satisfy consumers in the event of a claim. While the FCA claims that it has not become suspicious of misrepresentation in the industry, it will review 14 of the largest price comparison websites to assess business priorities and sales tactics.
The investigation is reportedly aimed at deducing whether “the customer or profit is really at the heart of the business model” used by price comparison websites. Users of price comparison websites will be surveyed about their browsing habits to work out how they interact with online price comparison services.
According to the BBC, over 40 per cent of car insurance policies are purchased on the Internet, often using websites that allow consumers to compare the prices for several policies in a simple overview. FCA spokesman David Cross believes that a large amount of consumers may be buying based on price rather than coverage.
“It’s all very well getting the cheapest insurance cover, but when you come to claim, if you find out that you can’t, then obviously that money’s been spent for nothing.”
The agency also plans to investigate the ownership of several price comparison websites to see if they are secretly owned and operated by insurance companies promoting their own services. It will study the tactics used by price comparison websites to detect if consumers are being misled into buying policies and extra services that are of limited or no real value.