Trust lacking in price comparison websites
- 23 November 2012
- From the section Business
Consumers' lack of trust in some price comparison websites means that they miss out on potential savings, a regulator has said.
A previous study by the Office of Fair Trading (OFT) said that consumers could collectively save up to £240m a year by using these websites effectively.
But the OFT has now written to 100 leading operators asking them to make information on websites clearer.
One consumer group recently called for comparison websites to be regulated.
The use of price comparison websites has grown significantly as more and more consumers gain internet access.
For example, the majority of motor insurance policies are now bought by drivers who search through price comparison sites.
In its latest report, the OFT said these websites had brought a "major step forward" for consumers in getting better value for money.
Yet it said that a review of 55 different sites had shown that many could improve on their privacy settings, their complaints process, the way results were displayed, and clear identification of who was operating the site.
The Data Protection Act requires that all businesses collecting personal data explain to consumers who is collecting their information, what they intend to do with it and who it will be shared with.
The report also urged consumers to:
- Look for opt-out options if they do not want their information to be shared
- Be aware of how results are displayed - by relevance, price or popularity
- Use different websites, rather than relying on a claim that the website has "found the best deal"
- Check who runs the site, not just the name, and use accredited websites if possible
"Price comparison websites help busy shoppers find a good deal, but people might not realise that by being a bit savvier they can get even more out of these websites," said Clive Maxwell, chief executive of the OFT.
"Not all price comparison websites have the same standards."
Watchdog Consumer Focus, which runs an accreditation service, said that these websites needed to trade fairly and openly to be regarded as trustworthy brokers between consumers and markets.
"An open and honest relationship with customers is vital given the consumer distrust of many of the markets they use comparison sites to shop around," said chief executive Mike O'Connor.
The consumers' association Which? has previously called for price comparison websites to be regulated because the information they provided was not always fair.
It said that initial prices could seem very cheap because sites automatically pre-selected certain options for insurance products.
That led to some quotes being misleading and could cause customers to spend more than necessary - a claim that was disputed by one comparison site.