A crackdown on "dishonest" prepaid funeral plan providers has been announced by the Government - which is proposing bringing the sector under the regulation of the Financial Conduct Authority (FCA).

The Treasury has said that it will consult on tougher regulation for the prepaid funeral plan sector to protect the elderly and their families, and the competition watchdog the Competition and Markets Authority has also announced a separate review into the funerals market.

The Treasury says that people at their most vulnerable are being pressured, harassed and misled by some pre-paid funeral plan providers, and that the Funeral Planning Authority (FPA) - which regulates 95% of the industry - does not have the power to prevent rip-off prepaid funeral plan providers from trading.

See our Prepaid funeral plans guide and 20+ crucial checks to minimise financial trauma for more information.

What will happen next?

The Treasury will launch a consultation seeking evidence on the current funeral plan market, the potential for customer harm in the sector and ways to improve regulation. This will close at the end of August.

The CMA's investigation will look at the funeral sector as a whole, including how prices of funerals have changed over time, and whether the information provided by funeral directors on prices and services is clear enough. In particular, the rising level of cremation fees will be considered as part of the review, with these now estimated to account for around 75% of all funerals.

The CMA will publish an interim report on its findings and views on potential remedies in six months, ahead of the final report in a year's time. If it finds issues of particular concern, the CMA could take further action, such as opening consumer or competition enforcement cases or launching a full market investigation.

What does the Government say about the crackdown?

John Glen, Economic Secretary to the Treasury said: "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 leaves 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."

Daniel Gordon, senior director of markets at the CMA, said: "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."