UKMoneyPot notes that Direct Line has recently started an advertising campaign suggesting that consumers should not trust price comparison sites (such as moneysupermarket.com, confused.com etc) and should instead get quotes directly from themselves.
The studies Direct Line conducted highlighted some interesting figures.
Firstly, 35% of people believe comparison sites searched the whole of the market. In fact, it is probably pretty much impossible for one website to compare every deal available for a product, especially when companies such as Direct Line choose, for whatever reason, not to participate. Confused.com does boast an impressive 97% coverage of the motor insurance market, and comparison sites have dramatically reduced the legwork needed to get a quote – you can fill in the gaps by going direct to providers if necessary.
Whilst I don’t believe that provider coverage is a major issue, more worryingly, the study also found that nearly 40% of people believe that the sites are providing a free service (or make money from advertising space) and do not realise that they probably make money from either passing client details onto providers (selling “leads”) or from commission from products sold via them.
I’m not going to knock the price comparison engines for looking to monetize their websites, but there does need to be more transparency about how they make their money. The financial services industry has had plenty of bad press from the misselling of products, often for big commissions. The middlemen who are the source of a large amount of financial business do not want to fall into the same trap.
How can we trust the sites to give us the best deal if we don’t know how they’re getting paid for our information? I think it’s up to the comparison sites to make it clearer to users how their valuable data will be used or sold.
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- eBay To Launch Price Match Guarantee On 20,000+ Items (July 5, 2017)
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