We have written to firms operating price comparison websites to raise concerns about fair treatment of customers and to ensure they are aware of their regulatory requirements. Find out more about what we said to the firms.
We have highlighted some areas of concern and proposed guidance for firms operating websites that compare financial products and the third parties that host their tools.
We also asked firms to consider whether they are introducing, arranging or advising customers on purchasing a contract of insurance – and whether they have the correct permissions to offer advice to customers.
As well as asking firms to consider whether they need to extend their permissions our letter also sets out examples of good and bad practice.
The letter follows a review of 19 firms carried out between June and September 2010. In the review we found that sites could be leading consumers to buy insurance deals that are inappropriate for their circumstances or they are not eligible for.
Key issues
Some of the issues we have highlighted to firms include:
- 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.
We are proposing this guidance because we found a lack of understanding about the regulated activity being conducted by these firms.
Firms regulated by us must follow our rules on how they provide services to their customers, such as having a formal complaints procedure. If you are not satisfied with the response you get from a regulated firm about a complaint, you may be able to take the matter to the Financial Ombudsman Service.
Search our Register to check whether the firm you are dealing with is properly regulated by us.
You can see our letter to firms operating price comparison websites.
The full text of the proposed guidance on the selling of general insurance policies through price comparison websites is also available. Firms have until 8 August 2011 to respond.
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