Price comparison sites need to pull their socks up, says CMA

They can be of great benefit, but they are not consumer champions and while only one is under investigation after a CMA review, they need to pay heed to its report

All is not well with price comparison websites

Price comparison websites are generally a thoroughly good thing. People should use them. They offer them the potential to save money on everything from motor insurance to credit cards to broadband deals, and more besides.

However, it’s important to remember that they are businesses, and their primary aim is to make money via the fees they generate from the companies they list.

There’s nothing wrong with that and in many cases they serve the consumer’s interest through doing so.

The energy market provides a good recent example of where that happened.

When British Gas (disgracefully) hiked its prices, thousands of customers walked. Most of them used price comparison sites to secure alternative, and cheeaer, suppliers.

British Gas thus paid a price for its action, while more keenly priced competitors won business. A win win.

But the sites are no consumer champions, as the Competition & Markets Authority has made clear.

If they were, then vulnerable consumers, disabled people for example, would find them easier to use than they sometimes do.

I’m in that group, and as an active user of the sites, I can testify that they don’t always work all that well if you don’t happen to tick the ‘standard person’ box. And a lot of people don’t.

According to the watchdog, some are sufficiently bad at this that they may be in breach of equalities law.

There are also concerns about the way they use their clients’ data, and over their marketing which can be unclear, and even actively misleading. Another criticism is that they work a lot better in some markets (eg car insurance) than they do in others (eg broadband).

It should be noted that only one of them, rumoured to be very prominent one with cutesy adverts (aw) is under investigation as a result of the CMA’s probe, and for a very specific reason: its use of ’most favoured nation’ contracts.

These prevent a company that does business with the site from offering cheaper deals with someone else. Depending on how they operate, such arrangements can be in breach of the law.

As regards the rest of them, the CMA’s report can be summarised as call for them to pull their socks up and try harder.

This is something that the industry, which has been doing very well for itself of late, would do well to heed if it isn’t to kill off the golden goose it has created for itself.

As for consumers? I said at the outset that they should use price comparison sites because, despite it all, they'll probably save money by doing so.

But to ensure that the eggs they get are as golden as the industry's are they would be wise to heed the CMA’s advice and put their details into two or three of them.

They all use different algorithms, and so even if they are among the industry's best, they inevitably all produce slightly different results.

It’s in the consumer's interest to go compare price comparison sites before they buy.