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LONDON - Price comparison sites risk misleading consumers and should be governed by a code of practice, an independent body says.
The Resolution Foundation, an independent research and policy organisation, said websites that compare financial products should sign up to a voluntary code of conduct on accuracy and impartiality.
It would aim to ensure that such services display up-to-date information, disclose how much of the market they cover and are transparent in the commercial relationships they have with product providers.
The number of aggregator sites has surged in recent years: supermarket giant Tesco was the latest to enter the market with car insurance website Tescocompare.com last month.
But, as their popularity has grown, they have attracted increasing controversy.
The sites say they offer an invaluable public service, giving consumers free, impartial product comparisons, and helping to bring transparency and competitive pricing to financial services markets.
But few price comparison sites are truly independent, largely owing to commercial considerations; most charge product providers levels of commission that vary, creating commercial interest in promoting certain products over others.
Research conducted by YouGov for the Resolution Foundation found that almost half the population - some 45 per cent of 2,010 adults polled - had used a comparison site to help them make a financial decision in the past year.
But the survey also found that many sites fail to explain their commercial relationships and risk misleading consumers, who could mistake promotional features, such as "best buys" and "editor's choices" as the best value products on the market.
Clive Cowdery, chairman of the Resolution Foundation, said: "Comparison sites are valuable in making informed financial decisions, but many sites are undermined by a lack of transparency about their commercial relationships.
"A voluntary code of practice would address this and encourage a growing market, without the need for further regulation."
Phil Hall, a spokesman for financial education charity, the ifs School of Finance, said students taking its personal finance qualifications learnt to be "wary about relying on any single source of information".
"The introduction of a voluntary code of conduct seems like an eminently sensible idea," he said.
The research assessed eight price comparison sites (Moneysupermarket.com, Fool.co.uk, uSwitch.com, Moneynet.co.uk, MoneyExpert.com, Moneyextra.com, Moneyfacts.co.uk and Kelkoo.co.uk), as well as the Financial Services Authority's comparison tables which, unlike the other sites, do not seek to generate revenue.
- REUTERS
