UK price comparison websites fail to meet consumer expectations and in some cases fall short of regulatory standards, the Financial Conduct Authority (FCA) warns.

It says the websites do not always give appropriate, clear information, and consumers’ focus on price and brand may distract from crucial features such as policy coverage and terms.

“Our review found they were not meeting our requirements in delivering fair and consistent outcomes for consumers,” FCA Director of Supervision Clive Adamson said. “We also found, through our consumer research, that consumers had a number of misconceptions about the services they provided.”

The websites are increasingly popular in the UK, where an estimated one-third of consumers use them to buy motor insurance.

The FCA says they provide an important service, bringing convenience and simplicity to buying financial products, but it expects the sector to “take on board” its findings.

Some consumers mistakenly believe the websites provide quotes on the best policies for their individual needs.

Some websites fail to disclose they are part of larger insurer or broker groups, which is against FCA rules, but the regulator has found no evidence the companies use the relationship to their commercial advantage.

The review finds price comparison websites have failed to fully implement FCA guidance published in 2011.

The British Insurance Brokers’ Association says it is not surprised by the findings, having first raised concerns in 2008.

“We now want to see the FCA drive home the recommendations it made in 2011 and ensure these are complied with,” association CEO Steve White said. “A level playing field is needed to ensure consumers receive the same protection wherever they purchase their insurance.”

The FCA review examined 14 price comparison websites between December last year and April, and also undertook consumer research with 50 participants.

Also see ANALYSIS