What to look for in a financial website
December 18, 2007
Over recent years an increasing number of consumers have started to rely on the Internet in order to get sound financial advice as well as for access to financial service and products.
With so many people using the Internet to look for financial services relating to everything from loans and credit cards to mortgages, car finance, and more, it is vital that the websites relating to financial products and services are of a high quality. However, there is worrying news about the quality of financial websites that are in operation these days.
A recent review by the Financial Services Authority into finance related websites showed that around 25% of financial websites were actually sub-standard compared the regulations and requirements. The results of the review, which entailed looking at nearly eighty financial websites, showed that there were a number of reasons for some sites being below par. This included information that was unfair or unclear, navigation that was not user friendly, information that was out of date, and important information that was hidden away rather than being clearly displayed.
Although the majority of the websites that were reviewed were fine, the FSA does plan future reviews next year on financial websites, and those still breaching the rules could face serious action. The FSA states that since websites are so commonly used by consumers looking for finance it is essential to ensure that they are of a suitable standard in the future.
One FSA official stated: “For many people the internet is the channel of choice for shopping around for financial products. However, it can expose consumers to high risk as they are able to make instant purchases without advice. This is why it is so important that firms’ websites are fair, clear and not misleading.”
So what should you be looking for in a financial website? Well, the first thing to look out for is a gimmicky website that simply tells you all the good things without any of the risks or necessary warning. You will find websites that offer ‘loan starting as low as’ or ‘loans from’ an advertised APR. However, what you actually want to know is the typical APR, as this is the APR that most people will be charged with that particular lender.
You should also make sure that the information on the website is clear and easy to understand. Websites that talk in confusing jargon may simply cause confusion, and the owners of the sites should know that the people using the sites will usually be lay people with no professional knowledge of finance. They should therefore lay the information out in a clear and easy to understand way.
Make sure that the website provides information on the risk of taking out a particular form of finance as well as pointing out the benefits. Many websites that were found guilty of being substandard did not direct consumers to important information, and this was pulled up by the FSA as a serious issue.
Alan Wright
18th December 2007
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