Tread with care when using price comparison sites to switch to a better deal on everything from energy to savings accounts
Consumers are being urged to beware the pitfalls when using price comparison sites to find best deals on everything from energy to savings. The latest warning comes as we are all being encouraged to switch in the wake of winter price hikes from the majority of the big six gas and elecricity suppliers.
Consumers can enter the size of their bill and the name of their existing provider on sites such as Moneysupermarket.com and uSwitch.com to work out how much energy they use. But the calculations are based on the new, higher tariffs. This means there is a risk of underestimating the amount of energy they actually use.
Mark Todd, of Energyhelpline.com, advises consumers to enter their usage in kilowatt hours, or inflate their bills by the price rise themselves. “This is an industry-wide issue for all energy price quoting tools during price rises.”
Meanwhile uSwitch.com is talking to the regulator Ofgem and other accredited sites about the issue.
With inflation standing at 2.7%, we also put our trust in these websites to help us get the best rate on our savings.
But commission is paid to these sites by some banks and building societies that could result in missing out on the best deal.
Some of those paying commission are promoted by omitting savings accounts from other providers that don’t pay a fee in a list of top rates.
However, following criticism, Moneysupermarket.com, visited by more than 40 million users in 2012, has tweaked its search process to make it clearer that there are two different types of lists – one with “featured” accounts and one with “all accounts”.
Yet to get a true list of the best-paying accounts from across all UK banks, the user still needs to select “all accounts” buried at the bottom of the list. The site has also scrapped a tick-box, hidden from initial view, which was automatically ticked without the consumer’s knowledge and removed savings providers that do not pay fees.
Kenny Jacobs, chief marketing officer at Moneysupermarket.com, says: “We do show the entire market, although not every account can be applied for directly. We have made this clearer to customers.”
Jasmine Birtles from Moneymagpie.com says when it comes to banking, Moneyfacts.co.uk is the “cleanest” of the comparison services. “However, it’s not as easy to use as some of the others,” she adds.
When getting a quote for an insurance policy some sites make assumptions about your situation, warns consumer group Which? These may be appropriate to your needs, but pay careful attention in case they do not apply to you.
A spokesman says: “If your home has a thatched roof or if you live on a flood plain, you may have to provide the website with this specific information – and if you forget, or can’t find a way to do so, you could be at risk of buying a policy that, if the worst happened, means you may not be able to claim.”
Birtles says that consumers should be on their guard with all comparison sites. “They are useful but need to be used with caution,” she says.
This is particularly true of motor insurance, where there’s a huge amount of competition. “In this case it’s helpful to speak to a broker on the phone – like AA or Kwikfit – where you can keep telling them you want a better price or you’ll go elsewhere. It’s amazing how they can magic up cheaper and better rates.”
Which? recommends checking more than one site when searching for any financial product. Meanwhile the City regulator, the Financial Conduct Authority (FCA), promises: “We will review the risks that price comparison websites present and whether they comply with regulatory requirements.”
Martin Wheatley, head of the Financial Conduct Authority, recently told MPs on the Treasury Select Committee that he thought price comparison websites were all being “gamed”.
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