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The Office of Fair Trading (OFT)has launched an investigation into comparison websites and their relationship with motor insurance companies, after preliminary evidence from MPs and the Financial Services Authority (FSA) revealed that customers might be losing out because of firms flouting the rules.
An earlier survey of 19 leading comparison website companies conducted by the FSA found failures in some of them to comply with rules on fair and open competition, both in terms of motor insurance, and other types of cover.

The OFT investigation however is dealing solely with the relationships between some of the websites and major car insurance companies, which are thought to be 'too cosy for comfort'.
While comparison websites have increased in popularity, promising to find the consumer the cheapest quote, the OFT wants to ensure that customers are not being misled or ending up out of pocket.
The watchdog said in a statement: 'We are asking insurers and others for their views on a number of aspects of the private motor insurance market that may raise competition or consumer issues, including the role of comparison websites.'
The OFT will be asking the websites to reveal any relationships they may have with particular insurance companies, and wants firms to explain 'how these relationships originally developed and the advantages they may confer on the parties involved'.
They will be asked to reveal whether the way in which websites charge commission 'has any impact on competition between them'. And, interestingly, they will need to tell the OFT 'the factors that determine whether insurance companies are listed on your site, including any reasons you might not allow a company to quote'.

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