Internet marketing has helped price comparison websites to grow exponentially over the last decade.
In fact, they’ve become an ingrained part of our online culture. Whenever we looking to purchase goods or services or renew car and home insurance, the majority on online users automatically turn to these sites. However, not everyone shares this enthusiasm. Consumers’ association Which is calling for price comparison websites to be regulated, claiming the information they provide isn’t always fair. According to an article carried by the BBC, Which claims that the information given to browsers is often misleading and can ultimately lead to online shoppers spending more than necessary.
The consumers’ association believes that shoppers are lured in by cheap prices and often buy without adequate research.
Many of the insurance quotes given online are based upon automatically pre-selected options which inevitably make quotations appear cheap. The reality is somewhat different when browsers personalise their quotations and end up paying far more than the initial quote suggested. Naturally the price comparison websites deny such accusations claiming their pricing structures are clear and completely transparent.
Which editor, Martyn Hocking, takes issue these counterclaims arguing:
“We do not think they are always fair, or very clear. Our research shows you will often get very cheap looking quotes from a price comparison website. When you click through to buy the insurance, you will get a far higher price from the insurer.”
As an example Hocking quotes certain online car insurance quotations. The price comparison searches feature pre-selected options which serve to lower quotations:
“They will assume that your car is always parked on the drive or in a locked garage. If you park on the street, when you go to click through to the insurer you will get a far higher quote than you would have done on that comparison website.”
Which tested this theory by employing researchers who used the sites anonymously, and discovered that the final prices quoted bared little resemblance to the initial quotation. Using the same name and history details, one researcher was quoted prices from the sites that varied from £310.28 for the initial quotation, to £660.20 for the actual personalised quotation. 9000 were also asked to rate 11 price comparison sites for value and honesty: the highest score any site returned was only 44%. Which also raised concerns about price comparison sites appearing to suggest that they give an accurate reflection of the whole market, when the consumers’ association in fact maintains that they only cover a small percentage of the total market, and therefore cannot adequately reflect the whole sector.
Which’s concern is shared by the City watchdog the Financial Services Authority (FSA).
It too has some concerns regarding the credibility of some of the claims on these sites, and will use the research from Which to further its own investigation into the sector. Price comparison websites, however, vigorously deny these claims and believe the service they offer is above-board and transparent.
Moneysupermarket.com, which finished second in the survey with only a 43% satisfaction ranking, naturally takes issue with Which’s contention. Head of content, Clare Francis, said the website’s own customer satisfaction survey found that 92% of people said they would use the site again.
“Last year we saved our customers £800m, so there are clearly a lot of people out there who really value the benefit of using a ‘free’ price comparison site to find the best deal for them.” When it comes to car insurance, for example, we compare more than a hundred companies, so you stand a much better chance of finding the best value cover, and the right policy cover if you use a comparison site.”