The Financial Services Authority (FSA) has ordered insurance price comparison websites to overhaul their systems after describing some of the information they provide as ‘misleading’.

The FSA is a financial watchdog, and it reported that many sites encouraged customers to pick products by price without giving enough information about the differing terms attached to each deal. For instance, information about excess claims was often inconsistent or wrong.

A number of sites also provided incorrect or out-of-date information or prices different from those charged by the broker or insurer.

The FSA has recommended that sites should warn customers to examine the features of products, as well as installing systems to ensure the correct information is sent to the broker or insurer.

Ed Harley, the FSA's head of financial promotions, said: ‘We are keen that the market develops in a way that ensures customers are treated fairly, and expect comparison sites to provide information that is clear, fair and not misleading.

‘Consumers should shop for the best deal, but it is important that they compare what's covered by a policy, and not just focus on the price. ’

The FSA looked at the market in 2006 and 2007 but took no action while keeping it under review. It acted now because sales of private motor insurance had risen to account for nearly 25 per cent of the market.

Stephen Haddrill, director general of the Association of British Insurers, said: ‘We support their guidance, and plans for regular visits to firms. ’

For further information visit, news.bbc.co.uk/1/hi/business/7201345.stm