Five things to watch out for with comparison sites
The Financial Services Authority (FSA) has slammed comparison websites for not providing enough information on insurance products. It says customers taking out policies such as motor and home insurance through one of these websites could have been misled.
So what can you do to ensure you're not sold the wrong policy and how can you use such sites most effectively?
1: Untick those boxes
When providing you with a quote, most comparison websites will make assumptions about your circumstances and automatically tick some of the boxes to speed up the process.
This can cause problems if you don't fit into a website's criteria - for example, if you live on a flood plain and are trying to find home insurance, or if you're over 80 and searching for car insurance. Always de-select these boxes first to make sure you get the right quote for the sort of policy that will fit your needs.
2: Avoid the cheapest quotes
It's tempting to go for the cheapest deal on offer. However, it's worth taking these figures with a pinch of salt.
With insurance policies in particular, comparison websites use default answers and high excesses (where you have to pay part of any claim yourself) to generate these impressive figures, and this could mean you end up with a policy that is not right for you.
3: Beware sponsored links
Many comparison sites will bump certain items to the top of their lists and neglect to give a full picture of all the products on offer.
This is especially true with savings products, and some sites will classify these accounts as 'bestsellers'. To avoid falling for this ploy, make sure you don't rely on just one website. Remember, the top accounts are usually only there because they sponsor the website.
4: Always shop around
When you decide on a product, you don't need to go through the comparison site to buy it. They are a good place to learn what's available and what competitors are offering; but no comparison website covers the whole of the market and several companies, including insurers Direct Line and Aviva, are not listed on any of these sites.
Go to the companies' websites directly to make a proper comparison before you commit to buying anything.
5: Protect your personal details.
Watch out for hidden third-party data buried in the small print, and read the details carefully before you enter your phone number or email address.
Remember, unless you un-tick these boxes, you'll end up getting spammed by other companies.
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.