Using internet comparison sites to save money is fraught with pitfalls, writes Paul Lewis
You can save money on financial products with internet comparison sites. But when you visit them how do you know they are comparing the whole market and doing it fairly?
There are five traps to be aware of.
1 The sponsored link. Many sites let firms buy their way to the top of the list. Normally these products are shown separately and the full list is given below the entries that pay for their position. But the sponsored links can fill a whole screen. So it is always worth scrolling down to make sure you are finding the real best buys.
2 The missing firms. Not every product provider is listed. Some choose not to be. Others do not provide the information regularly enough or in the right format. And some are just missed out. Some of the absent products might be the best deal. So try two or three comparison sites and compare them.
3 Paid-for adverts. The advertisements are normally separate and clear to see. But beware. The claims made in the ads may not be as clear or objective as the deals in the best buy tables. Always cross-compare.
4 Click-through payments. Every time you click on a link to a financial firm or product the website receives a payment. If the click leads to a sale the website will get more. The amounts of these payments are kept secret. So you can never be sure whether the way a product is shown or the prominence it is given depends on a good click-through rate. But the temptation must be there.
5 Deals and offers. Finally, the product providers study the way the best-buy tables are compiled and try to find ways of breaking into the top five by tweaking their product. That is why savings accounts offer a “bonus” rate for six or 12 months. That can propel them to the top only to plummet towards the bottom when the bonus runs out. If you buy one, make a note in your diary and switch in good time. Insurers will pare their premium to the bone by cutting back on the service or the extras or imposing a very high excess. You may not realise this trick until you make a claim.
You can avoid these tricks by going to the non-commercial comparison website www.fsa.gov.uk/tables. But be warned: it is a bit dull and not always easy to use.
Paul Lewis is a freelance writer. He presents Money Box on BBC Radio 4
This article is published in the 13 August 2009 edition of Community Care under the headline “Reality check on those website deals”