The Office of Fair Trading (OFT) said that a 'sweep' of 55 PCWs that it conducted had revealed that consumers' trust in PCWs was being undermined by a number of failings that it has urged industry operators to improve on. The regulator has previously anticipated that consumers stand to benefit from savings of as much as £240 million a year if they use PCWs "effectively".
"The evidence shows that usage of PCWs is held back by a lack of understanding, trust and confidence in some sectors of society," the OFT said in a report (31-page / 2.06MB PDF) into its review of PCWs. "Of those people who do not use PCWs as part of their search, 13 per cent say that they do not believe the websites are independent and impartial and eight per cent say they are too complicated, difficult or confusing to use."
PCWs need to "ensure that their privacy policies are clear" because the OFT found that data privacy was linked to consumer trust, it said. The website operators should do more to draw consumers' attention to the policies and ensure that they explain how and to whom consumers' personal data may be passed on to when they use their services, the regulator said.
"That is important so that consumers can make an informed decision whether to opt out of data being shared with third parties or being used for marketing purposes," the OFT said.
The regulator also said that PCWs must be "clear about the way search results are presented" after finding that the sites were not always open with consumers about the way its ranking results were organised.
"The basis of different types of search result (that is, ranking by relevance) as well as featured deals and offers need to be clearly explained so that consumers can distinguish comparisons based upon objective criteria from promotions that may be based upon commercial relationships," the OFT said.
The nature and scope of PCWs' search operation should also be explained to consumers, the OFT said. It said the explanation should include information on the "frequency" with which the site updates information on "pricing and stock availability".
Information about the businesses behind PCWs should also be clearly detailed, the OFT said. These details should include the name and address of the businesses and what commercial relationships they have with any of the "vendors of goods and services" whose offerings are displayed on the PCWs, it added.
The OFT said that PCWs that do not accept liability in relation to complaints about "comparison and search services" may be acting in breach of UK laws on unfair terms in consumer contracts. It has therefore urged the PCWs it has written to "ensure that there is a clear complaint and redress process" for those services.
OFT chief executive Clive Maxwell said that consumer trust in PCWs will become more important as the Government's 'midata' plans progress.
"Not all price comparison websites have the same standards and we are working closely with the Government and regulators to ensure that consumers are empowered to make informed choices," Maxwell said in a statement. "We hope this will improve trust and confidence among consumers who do not currently use price comparison websites, and who may be missing out on significant savings as a result."
"As companies release more data back to consumers under the Government's 'midata' initiative, there will be new opportunities for people to get better value using price comparison sites, so it's important that issues around consumer trust are tackled now," he added.
Consumer Affairs Minister Jo Swinson said that it is important that consumers' trust in PCWs is "well-founded".
"I welcome the work that the OFT has done to review this area and to make sure that consumers really are getting the best deals they can," Swinson said. "With our recent 'midata' programme, consumers will be able to get the accurate data on their buying habits needed for quality comparison sites to help them save money."