As average consumers, price comparison websites make our lives easier. By offering an easy way to compare and contrast the financial and practical aspects of various goods and services ranging from insurance to holidays, energy providers to car finance.
We know that if we shop around, we stand to get better deals on things we need every day. These sites posit themselves as platforms that give power back to the customer, due to increasing competition between businesses, encouraging ‘competitive rates’.
But just how effective are these price comparison websites for consumers and how do they impact on the businesses they compare?
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Many sites claim to offer ‘exclusive’ deals that can only be found through them. They have to make their money somehow – the sites make commission on completed deals. They know how to entice you in all ways they can, and various sites have been under the spotlight for being unclear in their published language regarding this.
It’s highly unappealing as a customer to feel as if you’re being kept in the dark, especially at your own expense. Not only that, comparison sites, have on numerous occasions like 2015, been under scrutiny from regulating body, Ofgem, for potential breaches of business competition laws, even after the regulator tightened restrictions on sites months before.
The CMA (Competition and Markets Authority) has agreed to undertake in-depth analysis of comparison websites in 2016 in order to safeguard consumer rights, and subjecting them to more stringent ‘propriety and transparency standards.’
Getting a quote
So, as a consumer it’s tempting to lean on comparison sites to make big financial decisions easier, but your search footprint can have a lasting impact on your credit score.
If you go on to purchase insurance or apply for credit through a comparison site, the provider will check your credit rating – these ‘hard’ searches will be visible to other lenders. Your credit score affects what deals you’re deemed eligible for – too many searches flags a warning to creditors.
Aversion to comparison sites
Aside from the annoying marketing campaigns, TV and in-app ads that comparison sites put on our screens, making us resent their existence, the sites are out of favour with certain providers of insurance and other products.
Many businesses make a big deal out of opting out of comparison site listings, directing customer traffic straight to their own websites, and in turn, offering exclusive rates we won’t see collated and published by third parties.
Sites like Parcel2go will offer rates not found elsewhere, so for now, best stick to the old-fashioned way. A pain for those of us who want everything compared in one easy list, but important for the savvy customer.