'Misleading' insurance sites alert

The City watchdog has warned that some insurance comparison websites could be misleading consumers because of the way they presented information.

The Financial Services Authority (FSA) reviewed 17 comparison websites and found that while they were all appropriately authorised, the clarity, fairness and accuracy of information given to consumers could be improved in some cases.

The review found a number of problems with the sites, such as some of them using assumptions to generate quotes, but not allowing consumers to review these assumptions.

Other issues included sites giving details on policies that were inaccurate and out of date, sites failing to list all of the features of a policy, and information on the excess consumers would have to pay being wrong or misleading.

In one case consumers were only given full information on a policy once they had committed to taking it out.

In another instance, a site failed to give the same level of detail for different policies, giving the misleading impression that some policies did not cover certain things when they did.

The FSA also expressed concern that the sites encouraged consumers to focus too much on price and not enough on the different features of policies.

It wants sites to warn consumers that the policies have different features and that these should be taken into account and to be consistent in the level of detail they give on different policies.

It also called on firms to have systems in place to ensure that the information they provided was correct and updated when necessary.

The regulator found instances where the quote given by a site differed to the amount actually charged by the insurer or the broker. In addition, it said sites that used assumptions to generate quotes should clearly highlight these to consumers.

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