Many aggregator sites fail to disclose commercial ties to insurance companies, which can mislead customers into thinking promotional features are actually the best value products in the market, according to new research.
The Resolution Foundation, which commissioned the study, has called for a voluntary code of practice for price comparison websites.
The ABI is also conducting its own investigation into a code of conduct for aggregators, and is in the process of consulting all insurance aggregators.
According to Resolution, the study by YouGov, 45% of people have used a price comparison site to help make a financial decision in the past year. However, the research also showed that many sites fail to explain their commercial relationship with product providers.
Clive Cowdery, chairman of the Resolution Foundation, said: “Comparison sites are valuable in making informed financial decisions, but many sites are undermined by a lack of transparency about their commercial relationships. A voluntary code of practice would address this and encourage a growing market, without the need for further regulation.”
Moneysupermarket.com said it would support such a move, claiming it has always championed transparency.
“We are the only totally independent price comparison site. Some price comparison sites may be deceiving because they are really just a front for an insurance company,” said Richard Mason, head of insurance at Moneysupermarket.com.”
Ashton Berkhauer, of uSwitch.com, said the aggregator supported the idea of making things clearer for the consumer. But he said more thought needed to be given before an industry-wide code of conduct was implemented.
He said: “We would need to know what body will oversee it and whether there would be fees charged.”
A spokesman from Tesco Compare, which lists many brands that are owned by parent-company Royal Bank of Scotland, said the company placed great emphasis on transparency.
Biba chief executive Eric Galbraith said: “This research clearly shows that aggre-gator sites are a dangerous tool, providing consumers with little more information than a comparison of price when they are choosing an insurance policy.”
Chris Hannant, head of market regulation at the ABI, said it would take the Resolution Foundation’s research into consideration and release its own report in about six months. He said the ABI would not take on a regulatory role, that would be the FSA’s responsibility.
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