Unscrupulous funeral plan providers face crackdown

Roman Schwartz
June 3, 2018

Demand for funeral plans has grown significantly in recent years, with annual sales more than tripling between 2006 and 2017, the government said.

The CMA will also investigate the rising level of cremation fees, given this now makes up an estimated 75% of all funerals, it said.

Action is needed because 95% of the market is voluntarily regulated by the Funeral Planning Authority (FPA), which lacks the power to prevent pre-paid plan providers from trading and whose code of practice is not legally binding, according to ministers.

Daniel Gordon, a senior director of markets at the CMA, said: "People can understandably be very emotionally vulnerable when planning a funeral".

A 2017 report by the consumer group Fairer Finance into the pre-paid funeral market "uncovered a litany of problems in the sector, both in terms of conduct and consumer protection", and urged the Government to step in "to protect vulnerable customers", the BBC reports.

A study by SunLife estimated the average cost of a United Kingdom funeral in 2017 to be nearly £3,800 - more than double the amount listed in the financial services company's first Cost of Dying report, issued in 2004.

The study will examine whether the information provided by funeral directors on prices and services is clear enough for people to be able to choose the best option for them.

Now 95% of the market is voluntarily regulated by the Funeral Planning Authority (FPA), which lacks the power to prevent providers from trading, according to ministers.

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"I'm appalled by the lengths that some dishonest salesmen have gone to in order to sell a funeral plan", said John Glen, economic secretary to the Treasury.

'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.

Across the country, the funerals market is estimated to be worth £2billion and there are 5,000 funeral director branches and 294 crematoria in operation.

Many plans do not cover costs such as embalming, limousines, a funeral service, a wake, burial plots or memorial stones.

"But tougher regulation will ensure robust standards are enforced for all plan providers and protect individuals and their families if things go wrong".

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. It wants to ensure that people have clear information on prices and services and get a fair deal on cremation fees.

Shares in funerals giant Dignity plunged 14pc on Friday morning following the announcements. We think it is important the process is made as easy as possible.

It is one of two major players in the sector, alongside Co-op Funeralcare.

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