Photo: buhny via Flickr
As of yesterday, Facebook users will be able to access the new CompareTheMarket app, a technological sensation that enables the public to compare everything from favourite football teams to the most popular credit cards.CompareTheMarket.com was established in 2006 and has since become the UK’s leading price comparison website. By linking its website with major social networks, the company hopes to expand its customer base globally.
As this new application gains fame with Facebook users, the Financial Services Authority warns that the price comparison website can provide misleading advice for some types of products.
By gathering information through online databases, the CompareTheMarket application provides users with categories for comparison with the most web hits. Users can then select topics to compare and share their comparison results with their Facebook friends. Since this application presents users with an abundance of topics, such as the hottest celebrities and the best car insurance deals, it appeals to customers of all ages.
In efforts to increase consumer awareness and protection, the FSA has publicized that the CompareTheMarket app does not abide by its rules.
Research teams from the FSA have found that the website fails to check consumers’ eligibility when comparing insurance products and credit cards. The FSA has informed price comparison websites to include a feature to properly disclose eligibility information to customers. The FSA regulator feels that the terms and conditions of insurance policies are far too convoluted for the average consumer to receive adequate information from a simple comparison website.
Price comparison markets responded that the majority of their customers rely on the intermediary selling the product, not their comparison website, when ultimately choosing products and services. Still, the FSA is fighting with price comparison websites because they found that “…it is often not clear what, if any, checks take place on customer eligibility.”
The FSA also argues that some comparison websites are misleading their customers by applying “five star” ratings to products. Research shows that these ratings are often representative of the cost rather than the entirety of the product. These ratings can ultimately lead consumers to assume that products with the highest ratings are the best for them. After several meetings, the FSA warned that, “Consumers… may believe based on the claims made by price comparison sites (or the absence of any statement to the contrary) that they are receiving a quote based on their individual demands and needs when they are actually receiving an illustrative quote based on a set of generic risk criteria.”
Chief operating officer at GoCompare.com, a competitor of CompareTheMarket, Lee Griffin, said that their main priority is to ensure that “their customers receive the best possible service.” The company has promised to study the FSA’s recommendations and to become compliant with their guidelines. Since GoCompare is a major competitor in the price comparison industry, other websites are sure to follow suit and look into the FSA’s requests.
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