Grave concerns prompt watchdog intervention on pre-paid funeral plans
The City regulator has launched a consultation on how it plans to regulate the pre-paid funeral plans sector, which has faced criticism from the media and consumer groups.
Under its remit, the Financial Conduct Authority (FCA) intends to ensure the products meet the individual needs to consumers, the plans are sold fairly and the price of the items are fairly valued.
The FCA will also ban provider cold-calling to prevent consumers being pushed into taking out plans which may not be right for them.
FCA executive director of consumers and competition Sheldon Mills said: “Pre-paid funeral plans can help people and their families to manage the costs of a funeral. It is vital that consumers have confidence that their plan will deliver the funeral they expect at a fair value.
“The measures proposed today will help ensure that the industry serves consumers well.”
Funeral plans allow consumers to pre-pay for their funeral, meaning the cost does not fall to their bereaved families in the event of their death.
But some providers have been behaving poorly, harassing and misleading vulnerable people by putting them under pressure to fork out for vastly overpriced plans that are not guaranteed to cover the cost.
Hargreaves Lansdown person finance analyst Sarah Coles added: “Grave concerns about cold-calling salespeople ripping vulnerable people off means the FCA will regulate the pre-paid funeral plan market from July 2022.
“Knowing your family won’t pay the enormous cost of a funeral after you’ve gone can bring enormous peace of mind. Unfortunately, opportunists have used this to their advantage.”