Are price comparison websites leading consumers astray
Price comparison websites are big business these days. Recent years have yielded bumper profits and it’s now pretty much impossible to go through an evening’s television viewing without being told to go and compare something or another. But do price comparison websites really help you sniff out the best deal? Perhaps not. According to a recent statement from the Financial Services Authority, it turns out that using price comparison websites might not be such a smart move after all.
The Financial Services Authority is the regulatory body for the financial industry in the UK. Earlier this summer, they urged price comparison websites to clean up their act after an investigation found that the way they sell insurance could result in the consumer being treated unfairly. The FSA stated that insurance customers could be misled by the websites, who do not make it clear which company consumers are dealing with and prevent the consumer from getting the full cover they need by failing to allow them to disclose key facts that could invalidate their policy.
That could result in you being underinsured, without even knowing it.
It’s not the first time that such websites have been criticised. Price comparison businesses are not licensed to offer financial advice. Whether they ‘introduce’ or ‘recommend’ services has been a contentious point for several years. Consumer group Which? has also voiced concerns over price comparison websites in the past for placing too much emphasis on the price of a policy, rather than the level of cover it provides.
We’re pleased to see that the FSA are calling on price comparison websites to provide a fairer service for consumers. That’s something we try our best to do every day. We’ve put a lot of thought into the quotation systems we use at World First so that when people visit us directly we can help them find the type of policy that’s right for them.
Our medical screening process also allows visitors to disclose all necessary information so they can be sure they get the full cover they require. And while our travel insurance policies may not be the cheapest on the market, they are certainly some of the most comprehensive. We think the peace of mind is worth a few extra pennies.
So what’s the conclusion? Are price comparison websites best avoided?
The FSA’s demand for price comparison websites to change their ways will certainly improve the service that consumers receive. And price comparison websites remain a good place to start your search for insurance. But when it comes to actually buying your policy, it could be smarter to go directly to the companies you’re interested in. That way it’s easy to find out more about each company and you get a clearer picture of what each policy offers. It might take a little extra time. But no longer than a couple of ad breaks.
If you’d like to find out more about travel insurance with World First, take a look at our Key Facts document.