Government launches investigation into treatment of consumers in funeral planning

The Government have recently launched a Call for Evidence into the pre-paid funeral plan market, following concerns over unfair customer treatment.

The aim of the investigation is to advise the Government on what is appropriate to include in the new model to improve transparency and have a better understanding of services – to help consumers make informed decisions on the right funeral for their loved one.

In addition, Competition and Market’s Authority (CMA) has started a separate study into the UK funeral sector which aims to understand the transparency problems around how funerals are delivered to the public – and how competition works in the crematoria section of the industry.

Commenting on the investigations into the funeral sector was Brian McMillan, Director General of The Society of Will Writers (SWW). He said: “The Society of Will Writers has been involved in the pre-paid funeral planning market for over 24 years, and the past few years we have seen not only a growth on the sales of plans but also the rise in providers who appear to put high commission incentives ahead of what the products are supposed to stand for.

The SWW entered the market with its own branded product on the 9 February this year, backed by the third largest group of independent funeral directors in the UK and being a whole of life policy backed by the UK’s largest insurance company to provide an ethical and morally acceptable plan.

The SWW welcomes regulation in this field, as like ourselves, the Funeral Planning Association (FPA) do a good job but they lack the teeth to do the job properly.

High commissions are totally unnecessary and being paid to high pressure salesman at the detriment to the consumer at the expense of family and loved ones, as most of these plans will mean the family will have to find additional funds when the time comes which is totally against the original concept of the plan.

Unfortunately, being ethical and believing in moral obligations are like being green; it comes at a cost: and regulation hopefully will resolve this situation. To gain a better understanding of the market the SWW has undertaken a survey/study amongst its members.”

Emily Deane of The Society of Trust and Estate Practitioners (STEP) welcomes simplicity into funeral provision and comments: “STEP welcomes the CMA’s review of the funeral market and the opportunity to improve clarity around funeral services and costs. We encourage family members to financially plan for funeral services in advance, if possible, and it is critical to be able to assess what service is being provided and how much it will cost. These are vital components of the decision-making process that will safeguard the individual and enable them to make a better-informed decision regarding a pre-paid plan. Any enhanced transparency or regulatory standards in this connection are welcomed by STEP.”

Matt Howells, Managing Director of Co-op’s Legal Services and Later Life business are pleased the funeral market is being investigated and further comments: “We welcome the announcements from the CMA and HM Treasury regarding the funeral market and funeral planning market and we are engaging fully. 

The Co-op has introduced new products and initiatives to the market to help tackle funeral affordability and we have also been calling for regulation of the funeral planning sector by the FCA. We welcome steps that protect consumers and help families access high standards of funeral care.”

Mr Howell adds further on the HM Treasury review: “Not all funeral plans are the same and not all funeral plan providers offer the same level of reassurance and protection.  Therefore, we are pleased that the pre-paid funeral market is being looked into. As part of a wider focus on improving the funeral planning market for consumers, we have recently improved our funeral plan offering and our plans have been independently recognised as amongst the best in the market.

Our recommendation is for people to always buy a plan from a provider that will ultimately deliver the funeral service to ensure clients receive consistency, quality control and greater flexibility.” 

Commenting on the Call for Evidence, Golden Charter Director of Communications, Gordon Swan adds. He said: “Golden Charter welcomed the Treasury consultation, is ready to embrace proposals that give additional protection and choice to consumers, and looks forward to playing a full part in the development of a robust regulatory framework.

As a registered provider with the Funeral Planning Authority (FPA), Golden Charter is already signed up to the strongest form of regulation available and has led calls for industry regulation to be strengthened further for a number of years. However, not all plan providers adhere to the same high standards. It is in this context that Golden Charter believe the right outcome for consumers, is for the funeral planning industry to move from voluntary regulation, on to a statutory footing.

Golden Charter has been preparing for formal regulation for some time: only maintaining relationships with third parties who always meet the high standards expected by independent funeral directors, using an inbound-calls-only contact centre, and strengthening risk and compliance functions. These practices ensure that Golden Charter, and the Independents who offer Golden Charter plans, are in a great position to embrace regulation, as a catalyst for a better way of doing business.”

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