The FSA has written to the operators of price comparison sites to warn them about fair treatment of customers and to ensure that they comply with industry regulations.

The letter follows a review of 19 firms that found that some sites lead customers to buy insurance deals that weren’t appropriate for their needs or that they weren’t eligible for. Some of the key issues that were highlighted;

  • making it clear that responsibility for checking customer eligibility or that the relevant information has been disclosed lies with the firms rather than the customer;
  • reminding firms that use a third party site (or ‘white label’ service) to make it clear to customers which firm they are dealing with and who they should complain to;
  • reminding firms to ensure they hold the correct permissions, especially to avoid giving regulated financial advice without holding that permission; and
  • reminding firms that use ‘white label’ services to check that their provider holds the necessary permissions to conduct regulated activity.

Graeme Trudgill of the British Insurance Brokers’ Association said: “For the FSA to say that comparison websites are falling short of their regulatory requirements is of great concern and we strongly believe that these recommendations must be implemented by the sites without delay. We think it is particularly important that the FSA has highlighted a concern that we share, where in many cases questions are pre-populated with default answers.”