Unscrupulous funeral plan providers face crackdown

1 June 2018

The government has launched a review of the funeral planning market and announced measures to regulate the industry more tightly.

Demand for pre-planned funeral policies has skyrocketed in recent times with annual sales up 245% in 2017 compared to a decade earlier, according to the Treasury.

However, nothing has been done to regulate the industry since 2001 and the government is concerned that consumers are being ripped off, pressured, harassed and misled by some rogue providers following research conducted by Citizens Advice Scotland and Fairer Finance.

For these reasons, the government will consult on stricter regulation for providers of pre-paid funeral plans and has proposed to bring the market into the supervision of the financial watchdog, the Financial Conduct Authority (FCA).

The industry is currently self-regulated and overseen by the Funeral Planning Authority (FPA). But the Treasury says that as the FPA is a voluntary self-regulatory body it does not have the power to stop providers trading and its code of practise is not legally binding.

Economic secretary to the Treasury, John Glen, comments: “I’m appalled by the lengths that some dishonest salesmen have gone to in order to sell a funeral plan. It breaks my heart to think that our oldest and most vulnerable are being pressured into funeral plans that leave their grieving families out of pocket.

“There are thousands of pre-paid funeral plans bought each year, and most providers are fair and legitimate. But tougher regulation will ensure robust standards are enforced for all plan providers, and protect individuals and their families if things go wrong.”

Managing director of Fairer Finance, James Daley, adds: "Funeral plans are an important and valuable product, and we hope regulation of this sector will give responsible companies the chance to thrive, and give consumers the necessary reassurances they need to buy in confidence.

"People who buy funeral plans are not around to measure delivery against their expectations, which is why it's so important there are clear rules around how companies must behave. And with most plans costing over £3,000 - it's important that customers can have total confidence that their money is safe."

A spokesperson from the FPA has responded to the launch of the review welcoming the Treasury’s decision: “We believe the consultation will demonstrate the effectiveness of the current regulatory regime operated by the FPA, and show that this provides a sound base for future regulation.

“In our view, the alternative regulation approaches suggested will result in a reduction in competition, and a less dedicated oversight of the market. This will impact negatively on customers, who will face increased costs, and far less choice.

“Instead, the government should look to enforce statutory regulation; making funeral plan providers register with the FPA.”

Competitions regulator launches separate review into funeral market

In parallel with the Treasury crackdown, the Competition and Markets Authority (CMA) has launched a review into the funeral market to examine whether information provided by funeral directors on prices and services is clear enough for consumers. Rising level of cremation fees will also be considered as a part of the review.

Daniel Gordon, senior director of markets at the CMA, says: “People can understandably be very emotionally vulnerable when planning a funeral. We therefore think it is important that – at what can be a particularly challenging time – the process is made as easy as possible.

“As part of this study, we want to ensure that people can at least receive clear information on prices and the services making up a funeral, and that people get a fair deal on the cremation fees charged.”


In reply to by anonymous_stub (not verified)

being a funeral plan holder, it has concerned me that my plan has a value to my family of £3000+ but it isn't protected by any legal means, other than I sue in court for fraud if my plan is mis-appropriated. we need this protection as there are unscrupulous scammers out there.

In reply to by anonymous_stub (not verified)

Re: BankingAs a customer of First Direct, I pay in at the local branch of HSBC. I pay some bills using bank transfers, while others are paid by cheque.

In reply to by anonymous_stub (not verified)

I am no fan of Co-op but they have the best value funeral plan service if you pay for a bespoke plan of your specification and no more to pay for anything unlike all the others I checked out which are no better than a savings plan towards a funeral. I paid £1,150 couple of years ago for basic services using spare place in my dad's grave, a new grave would have been £175 more. i own a new grave plot but now alone so will sell it back to parish council for others in the future, I prefer to be burried with my dad.

In reply to by anonymous_stub (not verified)

With no certainty as to what funeral plans are good and genuine and the stories abound about scams, I for one have no intention to fall for the fiddlers. We have a society of bankers on the make fiddling figures, politicians at it, doctors creating non existant patients, businesses filling their boots up whilst the pension pots of employees are plundered.If it wasn't all so sickening I might laugh .............

In reply to by anonymous_stub (not verified)

Not only the "funeral plans" but also the "over 50s life cover" play on the same emotions. If the main selling point is "you get back what you put in", then it must be more profitable for savers to put money into a regular savings account? At least that way you will earn interest, however meagre

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