UK financial policy group the Resolution Foundation has called on price comparison Web sites to introduce a voluntary code of practice to ensure transparency in their rankings of competitive financial products.
Research commissioned by the Foundation shows that 45% of UK adults used a comparison site to help them make a financial decision in the last year.
However, the research also shows that many sites fail to explain the commercial relationships they have with product providers. The Foundation says this lack of transparency risks misleading consumers, who can easily mistake promotional features such as 'best buys' and 'editor's choices' as being the best value products on the market.
Clive Cowdery, chairman of the Resolution Foundation says: "Comparison sites are valuable in making informed financial decisions - but many sites are undermined by a lack of transparency about their commercial relationships. A voluntary code of practice would address this and encourage a growing market, without the need for further regulation."
The issue was brought to public attention earlier this year by a high profile advertising campaign by the Royal Bank of Scotland which attacked the 'hidden relationships' between leading comparison engines and product providers. RBS has since launched its own service in conjunction with UK supermarket chain Tesco.
The idea for a code of practice has won the backing of several prominent price comparison sites. MoneyExpert.com, for instance, is calling on other major finance comparison companies to set up a trade body which would "help establish best practice throughout the sector and provide a single and cohesive voice for the industry on major relevant issues".
MoneyExpert chief executive Sean Gardner says he is writing to other leading companies inviting them to meet to discuss the way forward for the industry.
Insurance comparitor Confused.com has gone even further by lobbying for the introduction of a compulsory code of practice.
"We would welcome regulation that ensures comparison sites are more transparent in their market coverage and commercial relationships. However, we would argue that this should not be a 'voluntary code' but rather a 'compulsory code' ensuring greater piece of mind for the consumer," says Consuded.com MD Debra Williams. "It is for this reason that Confused.com has been working with the Association of British Insurers (ABI) to develop guidance for the insurance industry."