FCA investigates price-comparison websites

LONDON (Reuters) - The Financial Conduct Authority (FCA) is investigating whether people are being duped into buying inappropriate insurance policies by price-comparison websites.

Sites such as Gocompare.com, part-owned by insurer Esure, and Moneysupermarket.com have come to dominate personal finance in Britain.

Though the FCA supports the concept behind such websites, it said on Monday that it wants to be sure the rapid growth in their popularity "has not come at the expense of transparency and fairness" and it has launched a review of 14 websites and some insurers, representing 90 percent of the market.

"We want to get to a place where consumers that use these sites buy with the confidence knowing that they have all the relevant facts," Clive Adamson, the FCA's director of supervision said.

The regulator said its concerns centre on an "expectation gap", whereby people buy policies because the site suggests they are the best value for money only to discover when making a claim that the cover was not as comprehensive as they had thought.

"We've all used a price-comparison website, so we know how simple they make buying motor, travel or home insurance. We don't want to lose that convenience," Adamson said.

"But we do need to ask the question, does cheapest equal best?"

The review will focus on the most popular insurance products bought through price-comparison sites, namely motor, travel and home insurance.

(Reporting by Chris Vellacott; Editing by David Goodman)