Reuters article - price comparison sites (Martin near the end)

Price Comparison Sites -- How Impartial are They?
By Jennifer Hill, Personal Finance Correspondent
Reuters August 17, 2007LONDON, Aug 17 (Reuters) - Turn on the television, open a newspaper or surf the Internet nowadays and chances are a new financial price comparison site will pop up.

These so-called aggregator sites attract millions of consumers with the promise of searching the market to find them the cheapest deals on everything from car insurance and credit cards to gas and electricity -- all with little effort and no cost.
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As the number of sites proliferates -- almost indistinguishable names like MoneyExpert.com and MoneySavingExpert.co.uk; SimplySwitch.com and uSwitch.com; !!!!!!!!!!!!!! and ComparetheMarket.com; MoneyExtra.com and MoneyExpert.com -- evidence of their profitability mounts.
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Aggregators themselves say they offer an invaluable public service, giving consumers free, impartial product comparisons, and helping to bring transparency and competitive pricing to financial services markets.
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The all-inclusiveness of "best buys" is another moot point.

Fool.co.uk has a panel of 10 insurers for life insurance, 15 for home insurance and 32 for medical insurance.

Others -- MoneyExpert.com and uSwitch.com -- are unwilling to disclose how much of the market they cover, saying the information is commercially sensitive.

None, however, can survey the entire market because some financial services providers refuse to co-operate with them.

Royal Bank of Scotland (RBS) brands -- most notably Direct Line, but also Churchill, NIG, Privilege, Green Flag and Tesco Personal Finance -- are the most glaring omission from tables.

Direct Line launched a salvo against aggregators this summer, with a high-profile advertising campaign labelling them commission-hungry "middlemen".

Norwich Union Direct, CIS, Zopa and Kent Reliance Building Society are among those excluded in certain comparisons.

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The market is poised for further shake-up.

Tesco Personal Finance, part of RBS, is poised to launch its own comparison site, Tescocompare.com, which is expected to include quotes from RBS brands other than Direct Line.

"Tesco is very much looking to undermine other aggregators by offering better value to suppliers," an industry source told Reuters. It is expected to charge "on the lower side" of standard commission rates of 25 to 50 pounds per acquisition.

As competition intensifies, aggregators are striving to set themselves apart.

Confused.com says it is one of few sites to give fully underwritten guaranteed quotes; Fool.co.uk prides itself on its content and peer-to-peer advice community; Moneyfacts.co.uk has recently launched league tables for consistent savings rates and ethical financial products.

So-called "third generation" comparison sites allow consumers to compare products on more than just price: !!!!!!!!!!!!!! ranks insurance policies on the range of cover provided, whether the provider has UK-only call centres, a 24-hour claims helpline, free courtesy car as standard or free European driving certificates.

MoneyExpert.com, meanwhile, allows consumers to compare products on features and customer service, as well as price.

TOO BLUNT AN INSTRUMENT

Martin Lewis, founder of "free to use, free of ads, UK consumer revenge site" MoneySavingExpert.com, says such innovations are welcome -- as comparing products on price alone is fundamentally flawed.

Take savings accounts.

Alliance & Leicester (A&L) recently bounded to the top of the league tables with its high interest instant access account, knocking ICICI Bank and Icesave off the top spots. But customers who withdraw money will not earn any interest on the entire balance in that month.

"Marketing companies are very clever; they constantly come up with new and innovative ways to make things look good," says Lewis. "Comparison sites are too blunt an instrument to deal with that.

"(They) are, in many ways, part of the financial services industry: their prime aim is to sell you a product. But we're not: we're a consumer champion."

Lewis -- a personal finance journalist who established his site four years ago with 100 pounds -- is making money too: the site receives commission when consumers click through to 70 affiliated providers.

Payment, he says, never sways his editorial judgement. But many of these links take consumers to the very price comparison sites that Lewis says are flawed.

With server costs of 100,000 pounds per year, Lewis says he cannot afford to run the site without generating revenue -- and that by forging links with aggregators there is no opportunity for product providers to "try to exert any pressure".

But, like the founders of countless consumer financial sites before him, Lewis stands to make a pretty penny out of playing the consumer champion.

"I do hope one day it will make me a billion," he said. "There's nothing wrong with that, provided I haven't compromised my ethics."