The Office of Fair Trading (OFT) has published a report on its investigation into key cross-sector issues affecting consumer trust in price comparison websites (PCWs). The report, which follows a web sweep of 55 PCWs across multiple sectors, provides an insight into the issues that undermine consumer confidence in PCWs and offers guidance to websites on how to improve trust and transparency.
Key cross-sector issues
Key cross-sector issues include data privacy, transparency of information, exclusion of liability and complaints handling. The OFT guidelines aim to encourage PCWs to comply with consumer protection laws by meeting certain standards in key areas, including:
- Data privacy – PCWs should clearly and prominently state in their privacy policies how consumer information is collected and for what purposes. Consumers should be given an opportunity to opt out of third party data sharing and should be able to prevent the use of their information for direct marketing purposes.
- Transparency of information – PCWs should be transparent about how search results are presented (by price, popularity, relevance, best deal etc) and be clear about the market coverage of a search. The OFT hopes that clear presentation of results will make it easier for consumers to decide which ranking system or deal is best for them. Transparency in these areas will ensure that PCWs don’t overstate market coverage or fail to include information that is material to the accuracy of prices and stock availability, which may result in breaches of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs), the CAP Code or the E-Commerce Regulations 2002.
- Exclusion of liability and complaints handling – Many PCWs seek to exclude liability in relation to search and comparison services in their terms and conditions. The OFT considered that in most instances this is unlikely to be compatible with the Unfair Terms in Consumer Contract Regulations 1999. The OFT also found that it was virtually impossible to contact some comparison businesses, with many not providing contact details for complaints and failing to disclose the identity of the business operating the website. Failure to provide such information may also breach the CPRs.
In conjunction with its report, the OFT has written to 100 leading PCWs to highlight the practices consumers should expect of trustworthy sites.
Summary
The OFT, along with other sector specific regulators, has taken action against PCWs in recent years. This has included the closure of 19 unlicensed lead generation sites and enforcement action against misleading PCWs. This latest report provides useful insight into the key areas in which future enforcement efforts are likely to be targeted.