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FSA considers comparison website review
26 January 2008
Price comparison websites face potential investigation by the Financial Services Authority (FSA) following research by the British Insurance Brokers’ Association (BIBA) that has raised concerns around the recommendation of insurance products.
The research found that many customers were left confused by the differences in policies and BIBA has called on the FSA to perform an urgent review to update its rules for electronic introductions.
The study showed that many price comparison websites used assumptions as the base of the quote; something a third of insurance buyers were unaware of. BIBA warned that this could lead to consumers buying an inappropriate policy.
Eric Galbraith, chief executive of BIBA, said: “There are still too many people logging on and making a decision solely based on the price of an insurance policy, rather than the protections it offers them and potentially buying an inappropriate policy.
“Insurance products are complex, and it is important to understand the cover they provide. Brokers are professionally trained to help. Aggregators and technology are developing rapidly and consumers must be sold the right policy for their needs.”
Adam Richards-Gray, spokesperson for the FSA, said: “These are interesting and potentially significant findings, but we want to look at the report more in depth. We looked at this area in 2006-7 and were happy with our approach, but we do recognise that the market is growing and changing. The report has potential implications, but it is too early to say what we will or won’t do.”
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