egulation of Comparison Sites

egulation of Comparison Sites

For Immediate release – Monday 23 February 2009

Commenting on the announcement that the Comparison Consortium will work with ABI to agree a new industry code of practice for price comparison websites, BIBA Chief Executive, Eric Galbraith, said:

“I am not convinced that customers are being treated fairly by some of the comparison websites. BIBA raised this issued following our research last year which highlighted consumer detriment and resulted in an FSA review into the practices of comparison websites.

“Since early last year we have been calling for guaranteed premiums, the use of facts and not assumptions as the basis for quotations, explanations of what the policy does and does not cover and the differences between each insurance policy made clearly visible. I strongly believe that these factors should be a minimum standard practice for all comparison websites and should form the basis for any code of conduct. BIBA will continue to monitor the situation and work with the industry to find a solution.”

Steve White, BIBA Head of Compliance and Training, added:

“BIBA welcomes any move to improve the clarity and quality of information supplied to consumers via aggregator websites. BIBA supported the recommendations made by the Financial Services Authority’s review in 2008 and believe that the FSA’s Rules and Principles, particularly in respect of clear, fair and not misleading communication, if applied correctly and enforced, should give consumers adequate protection.”

In January 2008, BIBA published market research which showed that:

* Over half of insurance buyers interviewed believe that customers do not fully understand the differences between each insurance policy offered via comparison websites
* 94% of insurance comparison website users do not believe that the details of what the policy covers and does not cover are explained fully
* 84% of insurance buyers said that the details of insurance policies offered via price comparison websites can be confusing
* 93% of consumers believe that insurance comparison websites should be regulated in the same way as insurance intermediaries
* 63% of buyers are nervous about purchasing from comparison websites
* 59% of insurance comparison website users believe that it was not very obvious or not obvious at all who the policy was underwritten by.

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