Price comparison websites such as Moneysupermarket.com are to be scrutinised by the Financial Services Authority (FSA) and in particular the product ranking systems they use. The FSA will be looking at whether the ranking of insurance products can be interpreted as giving financial advice.

Some comparison websites are allowed by the FSA to arrange insurance but not provide advice – these are covered by the current rules on ‘electronic introduction’.

However, the British Insurance Broker’s Association (BIBA) argues that these rules were introduced before the emergence of comparison websites and has asked the FSA to investigate. BIBA research has found that the websites make a series of assumptions as part of their ranking process, yet customers are unaware of this.

They argue this may lead to unsuitable products being bought. BIBA wants to see greater transparency on the comparison websites and for people using them to make decisions not just on price alone.

The FSA have already looked at the issue in 2005 but decided no action was needed. However in the light of BIBA’s new research they have agreed to look again.

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