Channel 4 revealed that using price comparison sites costs consumers up to £500 a year in lost interest. Some well-known sites came under fire for advertising poor-value savings accounts as "best buys" despite rates being up to 37% lower than the actual best rates on the market.
Channel 4's Dispatches compared four major comparison websites, Confused.com, Go Compare, Moneysupermarket and Comparethemarket, as part of the investigation.
However, some corners of the financial services industry, such as the personal loans space, are making technological advances to provide people with more transparent results on comparison websites.
Nicola Georgiou, Managing Director at loan comparison site Freedom Finance said:
“Comparison sites are often a first-port-of-call when shopping for financial products such as insurance and loans. These platforms are a great asset for consumers as they can provide a representative selection of products from across the market. However, there are pitfalls that people should be wary of. In the personal loans space we are used to seeing headline rates being widely advertised but the reality is that these low interest rates are out of reach for most borrowers. Unless you have a perfect credit score, applying for a headline rate loan online will probably result in a rejection and can permanently damage your credit score.
Using comparison sites with ‘soft search’ technology, such as Freedom Finance, to apply for a loan will safeguard your credit score by only showing you the best possible products for your individual circumstances. Developments in technologies like these show that the industry is moving in a positive direction and tools like ‘soft search’ are set to become the norm in the near future.”
