A year-long study of online price comparison tools found that while they offer customers a range of benefits, one site is now set to be investigated over how it set up contracts with insurers.

While the CMA was unable to disclose the name of the site when asked, reports have pointed to comparethemarket.com.

In its report citing the reasons behind the investigation into the ‘unnamed’ comparison site, the CMA said it suspected customers may have paid higher home insurance prices as a result of ‘favoured nation clauses’.

Once a supplier has signed a contract with this clause, they’re not allowed to offer a cheaper price with a competitor site or comparison site. However, they can only offer the same or greater price with an alternative price comparison or competitor site.

It has also today laid down “clear ground rules” for all sites on issues such as communicating how they plan to use people’s personal data, and how important information such as price and product description should be displayed:

• They should be Clear, Accurate, Responsible and Easy to use (CARE)
• All sites should be clear about how they make money; how many deals they’re displaying and how they are ordering the results
• Sites should be clear on how they protect personal information and how people can control its use
• It should be made as easy as possible for people to make effective comparisons or use different sites, for example through better information about products.

Andrea Coscelli, CMA chief executive, said: “Our study has found that most people in the UK have used a comparison site at least once so it is vital that everyone gets the benefits they deserve. The good news is that more than 90% of the people we surveyed were very or fairly satisfied with the sites they used.

“But we have also found that improvements are needed to help people get even better deals. We have set out ground rules for how sites should behave, as well as being clear on how regulators can ensure people have a better experience online. We are also taking enforcement action where we suspect the law may have been broken.”

A comparethemarket.com spokesperson, said: “We welcome the CMA’s conclusions that digital comparison tools are a force for good which lower prices for consumers and inject competition into markets. Comparethemarket.com operates some simple contractual arrangements with home insurers to ensure that our customers always get the lowest available price. We welcome the opportunity to discuss this further with the CMA.”