Take care with comparison sites

Take_care_when_you_use_comparison_websites

Take care with comparison sites

That was the advice of Ali Hussain writing in the Sunday Times on 8 August 2010.

Comparison sites and insurers have been accused of helping to fuel sharp rises in fraud and insurance premiums by selling customer details.

The Times investigation found Admiral Group, which owns Admiral, Elephant and Diamond, sells customers details to firms like Call Connection which then sell them on to other insurers. Aviva apparently buys details from Call Connection.

The concern is that the details are processed in countries which do not have our data protection safeguards. CIFAS, a fraud prevention service, said criminals were increasingly using false IDs to buy insurance and then lodge false claims. In 2009 there was a 32 per cent increase in such activity.

The Times gave five things you may not know about comparison sites and insurers:

1.    Comparison sites sell your data. Call Connection work with about 100 insurers and brokers. The company buys data from companies who are unable to provide cover to you. Call Connection sells the details to other insurers who will contact you. Moneysupermarket.com stopped using this system after customer complaints. Admiral said it asks customers for permission to sell details. If you are concerned your details have been sold you can contact the Information Commissioner at ico.gov.uk.

2.    There may be cheaper deals available direct as some insurers offer cheaper deals if you approach them direct. They are trying to avoid the commission payment to the comparison site. Comparison sites say they have deals with insurers to avoid price differences, but it seems they can happen.

3.    You may not always get what you ask for as the comparison sites focus on price and what is offered may not reflect what you need. Often the excess will be high and that makes the premium look more attractive.

4.    A comparison site will not cover the whole market. Some insurers do not appear on comparison sites, and some are selective. Aviva says it stopped using comparison sites in 2008, but the RAC which it owns does use comparison sites.

5.    You may not be offered the same discounts on each site. This seems to be the case in the domestic power market. British Gas has a deal with Uswitch and Energyhelpline to offer £50 off the cost of an annual energy policy if you sign up online. The same discount is not available if you go direct.

Our comment: We found this very helpful information in The Times newspaper. The situation will change as this is a very fluid market. Just remember that comparison websites are in business to make money, the majority of which is commission on sales. If you understand how they operate, and their limitations, you may save yourself time, money and energy. Just don’t get carried away as they are not a public service, they are businesses offering convenience, a public convenience.