Price Comparison Sites Good and Bad.
The Competition and Markets Authority (CMA) has published its report on price comparison websites and is now setting ground rules for all comparison services and actually started a full investigation into one comparison service.
The CMA is the UK’s independent government department responsible investigating mergers, markets and regulated industries to ensure competition and protect consumers.
In the year long investigation of price comparison sites, it explored how sites can make it easier to compare and shop around.
In most cases, the CMA praises the role of comparison sites enabling people to quickly search, in an understandable way, to find a better deal. However, in some cases, it found that some comparison sites had agreements in place with insurers meaning that for them to be included in comparisons they had to offer a better discount deal than available on the market but the contract also prevented the same insurer offering deals to other competitor comparison websites meaning that consumers could end up paying more elsewhere.
MEANING: You need to use 2 or 3 comparison sites to try and get the best deal, just in case they are playing the 'lower price on one site compared to another site' game!
Comparison sites usually get paid an “introducers fee” of say £30 if you take out a bank account, credit card or insurance policy via the comparison site. This is known as ‘affiliate marketing’.
New ground rules have been set and a new doctrine of CARE has been born “Clear, Accurate, Responsible and Easy to use”.
The basic recommendations of the CMA were:
In support, the financial regulator, the Financial Conduct Authority (FCA) has welcomed the findings that on the whole, comparison services are of benefit but notes that certain types of contracts between suppliers and digital comparison tools can limit a suppliers’ ability to offer a lower price on one site than on another. They are working with the CMA to assist their investigation into this.
Next CMA Target
Watch out car hire and hotel/room booking comparison websites.