Jane Lucy, CEO and Founder of auto-switching service, The Labrador, discusses why auto-switching has to replace price comparison sites as meerkat models simply do not work anymore.
Price comparison website, Comparethemarket, has been under investigation from the Competition and Markets Authority succeeding reports that the company has prevented insurers from offering cheaper deals on competitors’ sites; breaching anti-trust laws. They have identified that “most favoured nation” between suppliers within PCW agreements mean that suppliers are only able to offer their best deals to one comparison site they have commercial links with. This undoubtedly has detrimental consequences for both consumers who are forced into paying more for this service, as well as stifling competition within the market.
For the last 25 years, consumers have been using price comparison websites to compare an array of providers and services, however, an overwhelming 82% of Brits believe they have lost money as a result of using the service, and a further third reveal they no longer use them at all. A further 64% of consumers report that it took up to an hour to complete the price comparison process with 82% of the nation stating that they saved less than £100 by doing so.
Jane Lucy, CEO and Founder of The Labrador is of the opinion:
‘Sadly, news that Comparethemarket has broken competition laws is unsurprising and has further highlighted the fact that traditional PCWs are failing their users. Uncompetitive behaviours in the consumer finance arena present such an acute issue for a nation disenfranchised across their energy, travel, insurance and credit requirements. It is encouraging to see the CMA asserting its influence on one of the most prominent companies in the arena. The Labrador has previously commissioned nationally representative research which found that 82% of Brits believed they had lost money as a result of using price comparison websites. It is now becoming clear that traditional price comparison sites are spectacularly failing consumers and the old PCW model has fallen out of favour. Auto-Switching services such as The Labrador, offer a transparent service that’s not only quick and easy to use but delivers substantial savings of up to £537, putting traditional PCWs to shame.’