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Page last updated at 13:47 GMT, Saturday, 18 July 2009 14:47 UK

Care urged on comparison site use

By Paul Lewis
BBC Radio 4's Money Box

A man typing on a keyboard
Millions use the sites each month in search of a good deal

Comparison websites have "an obvious incentive" to feature companies that pay them most, a competition expert has warned.

Professor Catherine Waddams said consumers should ensure comparison sites they use are comprehensive and unbiased.

Of five sites she studied only three indicated how they make their money.

The Comparison Consortium trade body says its new code of practice is designed to give consumers confidence.

Professor Waddams told BBC Radio 4's Money Box programme that comparison websites for financial products "have an obvious incentive to feature companies that give them the best rewards and companies have an obvious incentive to be featured prominently".

[People should] be sceptical and make sure they are not being taken for a ride because of the incentives
Professor Waddams, UEA

Research by the programme found that comparison websites make money in several ways, including direct advertising.

But much less obvious were the fees for prominent placement and for every customer who "clicks through" to a company, for leads generated and applications made.

Some sites make money in all these ways.

Professor Waddams said that although many sites indicated the companies that had sponsored links, customers also had to be sure that the site was not "prone to any temptation to feature more highly those that give them bigger rewards".

She advised the five million people a month who use these sites: "to be sceptical and make sure they are not being taken for a ride because of the incentives".

Customer concern

Professor Waddams' comments came in the week that a consortium of comparison sites produced a new Code of Practice designed to allay some customer fears.

Richard Mason, managing director of comparison site says it is intended to deal with consumer concerns.

Selected products or whole-of-market needs to be clearly displayed
Richard Mason, The Comparison Consortium

But he admitted that the sites are not always comprehensive.

"With some products it is possible to compare more of the market than others. For example current accounts, savings accounts and so on.

"When it comes to insurance, it is almost impossible to get every single player to quote at the same time. Some will not have a web-enabled product."

And he said sites should be very clear about which links were sponsored and which parts of their site showed an objective comparison list.

"Selected products or whole-of-market needs to be clearly displayed.

"Google makes it very clear on the left-hand side is a list of products if you search on a keyword and on the right-hand side there are sponsored links.

"We believe price comparison site should do likewise," he said.

BBC Radio 4's Money Box was broadcast on Saturday 18 July at 1204 BST.

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