The Financial Conduct Authority is to investigate price comparison websites to find out if they are misleading customers by promoting deals they want them to buy.

The City watchdog says it will look into potential conflicts of interest where the sites are paid by companies to feature their products, or are owned by insurers themselves.

It will also investigate whether focusing on price leads consumers towards sketchy policies which fail them when they come to claim.

FCA spokesman David Cross says: "If insurers happen to own a particular price comparison website, there's a concern that could create a conflict of interest whereby their products are promoted over others.

"When someone searches for something, are they necessarily getting the best deal for them, or are they just getting the deal the website wants to give them?"

The review of 14 sites will question company heads about "whether the customer or profit is really at the heart of a business model". The FCA will also survey site users to find out how they use them.

But it stresses price comparison websites "perform a valuable service for millions of people". The FCA says half of all internet users have used them to research motor insurance, with four in five going on to buy it through the same site.

It adds there is no suspicion of deals being actually misrepresented at any site.

Insurance group Admiral owns, while Esure has a 50% stake in Gocompare.

FCA director of supervision Clive Adamson says: "We've all used a price comparison website, so we know how simple they make buying motor, travel or home insurance. We don't want to lose that convenience, but we do need to ask the question, 'does cheapest equal best?'

"We want to get to a place where consumers that use these sites buy with the confidence knowing that they have all the relevant facts."

Martin Lewis
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