Price comparison sites warned over permissions

The Financial Services Authority (FSA) has written to price comparison websites urging them to ensure they comply with regulation.

The letter contained proposed guidance and highlighted concerns about a lack of permissions held by firms operating sites.

The regulator reminded firms to check they hold the correct permissions for their activities and ensure they have not been giving regulated advice without authorization.

The FSA said firms using the comparison tools of a third party, called "white label" services, must make clear to customers which firm they are actually dealing with and who to complain to.

It also urged firms to check the permissions held by the provider of comparison tools.

The regulator asked firms operating comparison sites to take responsibility for customer disclosure, rather than placing all responsibility for this on the individual.

Firms have until 8 August 2011 to respond to the proposed guidance accompanying the letter.

In May, research from SaveItBuddy.com revealed commissions earned by comparison sites from providers had hit £650m per year, but consumers drastically understated or did not know of that commission.

Research from MAPFRE Assistance found insurance brokers see comparison sites as their greatest competitor.