| Comparison site confusion |
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The way we buy insurance, loans and credit cards has changed for ever over the last few years. The leading online money comparison sites now account for substantial sales of most financial products promoting themselves as fast, efficient and cheaper. The biggest site Moneysupermarket took the lions share of the market handling up to 4.5 million monthly visitors. And with constant advertising on TV and in the press, Moneysupermarket.com and others like Confused.com, GoCompare and uSwitch are dominating the price comparison market. The comparison sites earn commission on each click through from their sites to an advertiser’s site and for each policy sold. Other companies pay for just advertising. But the money comparison sites are not without their critics. British Gas and BT have both complained about independence. Best Buy tables only include those companies who the site has a commercial relationship with and this does include the two utility giants. The British Insurance Brokers Association (BIBA) has complained that the sites make dangerous assumptions which have misled customers. In some cases customers have bought insurance they will never use. And independent financial advisers complain that while they are subject to time-consuming and costly regulation, the money comparison sites do not have to comply with the same strict rules when making a sale. The Financial Services Authority (FSA) is considering a similar rule for comparison sites. The main concern for customers is that while people think they are being shown the cheapest deals, there may in fact be cheaper ones elsewhere or ones with that are more appropriate to a person’s needs. Some customers complain they do not end up with the price they were originally quoted. Terms and conditions often add to the cost and the quotes are only an indication not an actual. By relying on limited amount of customer information, the comparison sites make a number of assumptions. Individual circumstances may not fit these assumptions leading to a higher final quote. And with savings, loans and credit cards criticisms can still be found as well. ‘Typical rates’ may be significantly different to the final rate quoted based on credit histories and other personal circumstances. Short-term bonuses are used to boosts rates and mortgage tables usually ignore higher lending charges. Arrangement fees can be substantial on some mortgages yet a particular deal can still be top of the ‘best buys’ because of the reliance on interest rates alone. To ensure that you are really getting the best deal both in terms of price and suitability, you should ensure that:
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