Price comparison websites 'fail to find cheapest quotes and mislead consumers'

Price comparison sites are failing to give the cheapest quotes for financial products, according to a consumer watchdog.

The sites offer a search facility that allows users to seek out the best deals for loans, insurance and credit cards.

But Which? Money says the online services can give startlingly different answers to similar queries.

It said that in many cases customers would be better off to deal directly with an insurer or bank.

The magazine ran checks on three of the largest price comparison websites – confused.com, moneysupermarket.com and gocompare.com.

Researchers trawled through the services, searching for deals on home contents, car and travel insurance and loans and credit cards.

A search on moneysupermarket.com for the credit card with the lowest standard rate of interest came up with one at 6.8 per cent. Yet on gocompare.com the best figure given was

12.9 per cent.

The magazine found that the price of basic home contents insurance varied by as much as £20.

Gocompare.com gave a figure of £51 for one search while confused.com offered £71.

At the same time, the researchers found a £68 insurance quote on the Bradford & Bingley website.

An identical policy was seen to cost £100 on gocompare.com, £72 on moneysupermarket.com and £83 on confused.com.

Which? said that consumers would do better to visit all three sites, providing they could cope with the extra information.

One explanation for the inconsistent results was that websites ask customers different questions when trying to determine which deal would suit them best. In addition, some financial institutions pay comparison websites a fee for referrals and it is thought this might skew the results.

Martyn Hocking, editor of Which? Money, said: ‘With such an array of financial products to choose from, it can be tempting to turn to a price comparison site to do the legwork for you.

‘But you might be very confused to find that different sites can give you vastly different quotes and often don’t give enough information for you to make an informed choice.

‘You need to use two or three comparison sites and check directly with providers to get the best quote.

‘And remember that cheapest isn’t always best. It’s a false economy if you don’t get enough cover for your needs or have to pay a huge excess if you claim.’