BIBA welcomes this practical move from the Financial Services Authority’s to improve consumer protection. These sites are relatively new and have not been the subject of any specific targeted regulation because the FSA rules were written before they gained the wide market penetration they now enjoy.
Graeme Trudgill, BIBA’s Head of Corporate Affairs, said:
“These sites have primary involvement in the sale process of personal lines insurance and it is very important that they have appropriate regulatory guidelines in place.
“BIBA agrees in full with the draft FSA guidelines and is keen to co-operate with the regulator and the comparison sites to see these guidelines implemented and supervised appropriately. We believe the cost benefit analysis demonstrates these important changes can be implemented for a relatively small sum.”
BIBA’s top three issues that it would like to highlight in order to prevent consumer detriment are:
- The sites must be recognised as more than just introducers, they are arranging, sometimes advising and these activities bring more appropriate regulatory responsibility.
- Comparison sites must provide customers with the relevant information including the disclosure documents. They must ensure their sales procedures are in accordance with the ICOBS rules. They must explain the terms and conditions, ensure the customer’s eligibility, provide status disclosures around suitability of advice and provide a proper statement of demands and needs.
- The practice of ‘pre-population’ of answers with defaults should end.
Steve White, BIBA’s Head of Regulation and Training said:
“The full detailed draft guidelines are an important step in consumer protection, they should lead to greater clarity giving customers a better understanding of the products they have purchased and less chance of them buying an unsuitable product. The guidelines should be fully implemented without delay.”
