UK: UK's Financial Services Regulator Finds Price Comparison Websites Are Failing

Last Updated: 3 August 2014
Article by Susan McLean

The UK's financial services regulator, the Financial Conduct Authority ('FCA') issued a report on 16 July 2014 identifying that price comparison websites operating in the general insurance sector are failing to meet consumers' expectations and, in some cases, the FCA's regulatory standards.

Websites that compare the general insurance products (such as car, home and travel insurance) offered by various providers ('PCWs') have grown in popularity in the UK over recent years. Indeed, some PCWs (such as, and are now well-established UK brands, and the FCA estimates that one-third of UK consumers purchase their general insurance through PCWs.

PCWs are subject to the rules detailed in the FCA's Insurance Conduct of Business Sourcebook (ICOBS) and the guidance on the selling of general insurance via PCWs that was published by the FCA's predecessor, the Financial Services Authority, back in October 2011 ("Guidance").

The FCA launched a review into PCWs in 2013 ("Review"), as it was concerned that PCWs may not be providing appropriate information to allow consumers to make informed decisions. The FCA reviewed 14 PCWs which together account for more than 90% of general insurance products sold via PCWs in the UK, and considered the extent to which PCWs had implemented the 2011 Guidance. The FCA also carried out consumer research with 50 participants.


The FCA found that a number of PCWs were not meeting regulatory requirements in delivering fair and consistent outcomes for consumers. The FCA also found that consumers had a number of misconceptions about the services provided by PCWs. Although most PCWs had taken steps to comply with their regulatory obligations, they had failed to fully implement the 2011 Guidance.

In particular, the FCA identified that:

  • PCWs did not always present sufficient product information (e.g., in terms of policy coverage, plus any excesses and add-on fees) in a clear and consistent way. Accordingly, there was a risk that consumers would not be making properly informed decisions.
  • Consumers were price focused when using a PCW and some mistakenly believed that the extent and quality of coverage was largely the same regardless of price. Price is shown more prominently than other information provided, leading consumers to go for the cheapest policy. The FCA emphasised the need for consumers to understand that not all products are the same, and the cheapest product may not always be the best for their needs.
  • By using buttons such as "Proceed", "Go to site", "Get insured" and "Buy now", some consumers may act on these messages and proceed to buy a policy without assessing its suitability. Alternative labelling, such as "learn more" and "more info", which invited consumers to look further, without the fear that they were committing to purchase, was considered more appropriate.
  • PCWs did not always make clear their role in the distribution of the product or the nature of service they provided. Indeed, some consumers mistakenly believed that PCWs had provided them with quotes on the best policy based on their individual needs.
  • PCWs which are part of a larger group of an insurer or broker did not always disclose this potential conflict of interest, which is against FCA rules. However, the FCA found no evidence that these firms used this relationship to their commercial advantage.
  • PCWs were not always clear about their remuneration.
  • Although PCWs carried out due diligence on the insurers, brokers and intermediaries with whom they had contracted, many did not conduct follow-up due diligence to ensure that the provider continued to hold the correct permissions.
  • Certain PCWs did not have secure access control over customers' accounts, exposing consumers to the risk of sensitive information being inappropriately disclosed.
  • Certain PCW terms and conditions were not easy to read or digest.
  • Many PCWs did not regularly review their websites to ensure that their disclosures on their practices, procedures and regulatory status were up-to-date and compliant with regulatory requirements.
  • Certain PCWs did not explain clearly how customers' data would be used, and opt-in/out processes were unclear.
  • Guidance on how to make a complaint was not always easy to find, and some was out of date.
  • Certain PCWs had misleading financial promotions.


The FCA has recommended that all PCWs:

  • take reasonable steps to ensure consumers have appropriate information to make an informed decision;
  • provide a consistent level of information from different providers to allow consumers to easily compare products;
  • make clear their role in the distribution of products and the nature of their service;
  • ensure that they are compliant with relevant regulatory and legal obligations, including those relating to complaints, data management, financial promotions, due diligence and conflicts of interest; and
  • ensure that their customers' interests are genuinely at the heart of how they run their businesses.

In addition, the FCA encourages PCWs to consider the voluntary guidance for comparison websites issued by the European Insurance and Occupational Pensions Authority (EIOPA) in January 2014.


The FCA has asked all PCWs involved in the Review to take action where they are falling short of expectations. The FCA will be conducting follow-up checks to ensure compliance. The FCA also expects insurers to consider the findings of the Report, and work with PCWs to address any issues.

It is worth pointing out that the FCA believes that the Report's findings have relevance beyond general insurance. PCWs that provide a comparison service for other financial products should also consider the findings, and evaluate whether they are meeting their regulatory requirements. Accordingly, all financial services PCW operators should now review their existing processes, website/app design and architecture, policies, and terms and conditions to ensure compliance with the FCA recommendations.


This Review is one of a number of regulatory activities currently affecting the UK general insurance sector. For example, in March 2014 the FCA announced a proposed shake-up of the sale of general insurance "add-on" products (such as legal protection), following an investigation into the sector. In addition, in June 2014 the UK's Competition and Markets Authority ('CMA') published changes that it proposes to make in order to increase competition in the private motor insurance market and reduce the cost of premiums for motorists. A consultation is underway, and the CMA's final decision will be published in September 2014.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Susan McLean
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.