Confused by price comparison websites? You should be
The price comparison sites tell us they’re the consumer’s friend, that they’re the place to go to get independent advice about the best deals.
But tonight on Channel 4 News we reveal how one of the biggest, Confused.com, claimed it showed products from the whole savings market but in fact only presented results for the companies it received commission from.
And within hours of being contacted by Dispatches, which carried out the investigation, Confused removed the entire savings section from its website, conceding its savings solution didn’t meet “our high standards”.
As part of the Dispatches investigation, we put the comparison sites to the test, pitting the big four – Go Compare, Moneysupermarket, Confused and Compare the Market – against each other.
We searched for the best deals for a saver wanting to put money into six different kinds of saving accounts. But we found a huge variation both in the number of accounts the comparison sites found – and in their best interest rates.
In the tests we carried out Confused.com performed the worst by far. For instance, Moneysupermarket found 127 tax-free ISA accounts, but Confused.com found just seven. And Moneysupermarket’s best rate was 1.9 per cent, Confused’s 1.2 per cent.
On our savings bond test, Moneysupermarket found 43 savings bonds while Confused found just nine.
In fact, if we’d gone with Confused’s recommendations, its best-buys would have left us over £500 a year worse off, compared with the best buys from the other sites.
Worse still, Confused claims it compares savings accounts from a “wide range” of companies and has a system “where everybody wins”. It says savers would be shown accounts from companies it has “commercial relationships with” but they could see the rest of the market by clicking “View more”.
But we found a major problem with that promise. It wasn’t true. There was no “View more” button for savers to click on. That means that far from offering a “wide range” of providers, as it promised, instead Confused just showed a shortlist of products from the eight companies it seems to have deals with.
Confused told Channel 4 Dispatches: “We recognise our savings comparison solution didn’t meet our high standards and we’ve taken the decision to suspend our offering as we look for ways to make improvements.”
Confused’s admission comes just a week after Ofgem, the energy regulator, said it was investigating the comparison websites and whether they have breached competition law when it comes to the best buy recommendations they produce on energy deals.
So the pressure is already on. Given that, we took our results to the Financial Conduct Authority, which regulates the financial services sector on behalf of consumers. Precisely the people you’d expect to get hot under the collar about Confused’s admission on its savings website.
Yet the FCA told us that while it was looking at the comparison websites generally, there was no specific regulation in place for their activities around savings.
It simply said: “We expect firms to be clear in any communication they make with consumers, so that they are able to make informed decisions.”
The Treasury appeared to take a tougher line, however.
It told Channel 4 News: “The tough regulator we created, the Financial Conduct Authority, is currently considering the role that Price Comparison Websites play in the provision of financial services. The government fully supports the FCA in this work, and stands ready to assist.”
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