View more on these topics

Regulator cracks down on comparison websites

Price comparison websites that promote one mortgage product over another will need to be regulated, according to the Financial Services Authority.

Last week the regulator wrote to firms operating comparison sites informing them of what does and does not class as regulated advice.

It reviewed the practices of 19 comparison sites offering financial products and says many have designed their systems and controls to maximise revenue and have not paid sufficient regard to regulatory compliance.

The FSA says many of the firms it reviewed did not hold the appropriate permissions to carry out the service they offer.

It gave a number of examples of when a site is offering advice, such as displaying the name or logo of one product that suggests it is to be preferred over other products.

The regulator also says consumers may be being misled about the services they are receiving.

Based on claims by the sites consumers may believe they are receiving a quote based on their individual needs when they are actually receiving an illustrative quote on generic risk criteria.

Mark Lofthouse, chief executive officer of Mortgage Brain, would welcome some form of regulation of the sites.

He says: “Comparison sites offer a variety of services. Some provide information only while others provide referrals to brokers. It seems reasonable that there should be some guidelines for them at least, if not full FSA regulation.”

The FSA has asked all comparison sites to consider whether they are establishing, implementing and maintaining adequate polices in relation to the services they offer.

They have until August 8 to give feedback to the regulator.

Recommended

Unemployment falls by 88,000

UK unemployment fell by 88,000 in the three months to April this year, to 2.43 million, the latest figures from the Office for National Statistics shows.

COVER_FEAT.jpg

Taking cover

With mortgage volumes flat the focus has shifted to adding insurance to brokers’ targets, but there is concern that creating a pressurised sales environment could lead to clients being sold cover they don’t need or want

How to cut mortgage fraud risk

Recent figures from Financial Fraud Action UK revealed a financial scam was committed, on average, every 15 seconds during the first six months of 2016, says Roy Armitage, head of credit at Lendinvest. That represents a 53 per cent rise year-on-year, with these scams coming in all shapes and sizes. Furthermore, a staggering 56 per cent of […]

Newsletter

News and expert analysis straight to your inbox

Sign up