How on earth have oxfam been dragged in to this?

by Saul on 17 February 2010  |  1 comment
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Oxfam launch a price comparison website called Compare For Good. However, it all seems a little sinister.

Price comparison has always been a relatively tasteless market, but we have seen a new trend of unsavoury activity amongst the UK personal finance website community.

First up was Martin Lewis and his promotion of 50p donated to the Haiti fund for each new registered money saving expert customer. This was effectively a referral programme, so you got people to sign up to his newsletter and, as long as they were real and had not registered before, Martin donated 50p. So what was wrong with this? In essence nothing, any charitable activity is commendable, but I just felt uncomfortable with it for a couple of reasons (and before this reads as accusatory I would just like to go on the record by saying that Martin Lewis does donate a % of his companies earnings to charity every year, which is very commendable).

1.    It was a marketing campaign, designed to drive in new customers. There seems something ethically wrong about using such a devastating event to drive in custom or customers.

2.    The value seemed low to me. moneysavingexpert.com is probably the second largest personal finance website in the UK, the largest being moneysupermarket.com. Despite being an advertiser free zone, many links mentioned in the content are back ended by none other than... moneysupermarket.com. Therefore it makes a lot of money. A lot of money. It is run by a small team (great job though by the small team). You could say that Martin Lewis is the money saving expert, but a more accurate term may be a money making expert; the site does very well commercially. What is the point? Well he has profited through helping people with money. Nothing wrong with that, he is very good at what he does, and the majority of his advice is pretty strong. I would estimate that the actual commercial value of a new registered customer over their lifetime (lets say 18 - 24 months) would be in excess of £10 (that is a profit number after their costs). Therefore Martin's contribution of 50p feels pretty miserly.

However, this week's launch of compareforgood.com is a step further. compareforgood.com is essentially a white label of beatthatquote.com. They say that two thirds of all revenues generated by compare for good are donated to charity. So where is the problem?

1.    beatthatquote.com will run the price comparison service, and will pay compareforgood.com a % of the commissions it receives, it would then appear that two thirds of those commissions go to charity. I really hope that beatthatquote.com are paying compareforgood.com 100% of the commission received through the website. If not, it means that compare for good is only handing over two thirds of the percentage it receives from beatthatquote.com. In true financial services style, this is not clear at all from the compareforgood.com website. This worries me, because when it is not clear, it normally means something dubious is taking place.

2.    Two thirds? Why? compareforgood.com is just a complete white label of beatthatquote.com, its admin costs will be tiny, so what is the one third retained used for? So strange. I presume the spokespeople, Joan Collins and Ivan Massow are not profiting in any way from this, so why is the one third needed, and what are the admin costs?

3.    The service is unethical by what we consider to be good practice & standards. beatthatquote.com do not offer their customers the ability to see the whole market. beatthatquote.com will also just collect lead information in areas such as life insurance, and then sell it on to the highest bidding IFA or loan broker. That lead will then be sold on again and again in all probability.

Why on earth would Oxfam let their brand be associated with this sort of thing without doing the correct due diligence. Price comparison is a very competitive space, with cut throat antics for driving in custom. I go on the record by saying we would offer Oxfam a better, whole of market, fully online service where we would donate 100% of ALL revenues to Oxfam and pick up the admin costs ourselves. I am sure others would do the same thing. Using charity to drive customers and profits in price comparison is just not on, and anyone using these practices should be ashamed of themselves.