UK Consumer Finance – A Look at How Financial Comparison Websites Can Be Misleading

Here in the UK there are thousands and thousands of websites that deal with consumer finance, from the big banks looking to attract new and loyal customers all the way through to comparison websites that want to introduce you to the aforementioned big banks or to sell your personal information on as a sales lead. Any way you slice it everybody is trying to get money out of the consumer.

As far as the big banks and building societies are concerned they have their customer proposition and websites explaining their products. They are fully regulated by the Financial Services Authority and have a government appointed Ombudsman. Then we come to the comparison sites, now they are not all bad, I can think of about a dozen that are actually quite good.

Most of the bigger financial comparison websites in the UK have certain practices that I do not like, promoting: “Partner’s Products” or “Best Sellers”, especially when they are clearly inferior to products elsewhere on the same site. Another common tactic in respect of mortgages is to only link to institutions that pay the website for the lead, if no relationship exists the user is then invited to complete a form to be contacted by an Independent Financial Advisor.

So, you couldn’t really describe the bigger financial comparison websites as “consumer champions”.

However, it is the other websites that concern me, the ones that are only interested in promoting the product they get paid for or the websites that want your personal detail so as they can sell them on. Some of these websites carry incorrect and misleading information. One recent example on a website that I spotted was a company offering credit cards, in a credit card best buy table entitled, “Low APR”, they had four cards none of which had a low APR and to cap it off the table actually contained details of the card with the highest APR of any credit card in Britain.

Why was that card there, the answer is that the Credit Card company has an Affiliate Marketing Programme and it pays good commission.

The key question for me is whether or not the customer is being misdirected or is being offered an inferior or more expensive product for the financial gain of the website. In many cases the answer is YES!

Unfortunately, the web should be a place for anyone to get information to help them draw up a list of options or opinions, to help them make a decision or to be more informed, but it is not. The web has become a sales channel and in any sales situation the buyer must be aware, that they have to “beware”.

My name is Malcolm Murphy and for many years I have worked in the consumer finance industry here in the UK. The last 4 years have been spent working as the Head of Online Sales for a financial research company supplying banking data to many of the UK’s leading consumer finance websites. During this time I have learned all of the tricks used by other consumer finance websites.