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Crackdown on 'shameful' prepaid funeral sales tactics

The Government has announced plans to crack down on high-pressure sales tactics from prepaid funeral plan providers – and wants the financial regulator to oversee the industry.

Prepaid funerals – where consumers make advance payments to a provider who agrees to plan or pay for their funeral when they die – have surged in popularity in recent years. There's been a 200% increase in the number of plans sold between 2006 and 2018, with 177,000 plans taken out last year.

But a call for evidence last year showed widespread concerns about the industry, with some providers using high-pressure or misleading sales tactics to persuade customers – who are often elderly or vulnerable – to sign up to plans.

At the moment, most of the funeral plan sector is regulated by the Funeral Planning Authority (FPA), but firms can choose not to sign up to its code of practice.

Now the Government is consulting on plans to bring the sector under the regulation of the Financial Conduct Authority (FCA). This would mean all funeral plan providers would be under compulsory regulation, and any rule-breaking firm could be fined, face criminal charges or have its authorisation revoked.

See our Prepaid Funeral Plans guide for more info about these plans.

What are the Government's plans?

The Government is consulting on plans to strengthen the regulation of funeral plan providers, and make sure they're all governed by the same rules:

  • All prepaid funeral providers would be regulated by the FCA. Funeral plan providers would need to be authorised by the FCA to sell and carry out the plans, meaning all firms would be subject to the same standards.

    The FCA would be able to introduce rules for funeral plan providers, such as how contracts must be settled and how much can be charged in administration or cancellation fees. Those found breaking the rules could lose authorisation, or face fines or criminal charges.

    At the moment, some providers are regulated by the FPA, but this is voluntary and the authority doesn't have any statutory powers.

  • Consumers would have access to the financial ombudsman and a compensation scheme. Consumers buying funeral plans would be able to complain to the financial ombudsman if things were to go wrong.

Under the plans, the FCA would regulate funeral plan providers and any intermediaries they use to promote or sell funeral plans – for example, cold calling centres or lead generation websites – but wouldn't regulate the funeral directors themselves.

The Government's consultation on the proposals will be open until 25 August.

What does the Government say?

City Minister John Glen said: "Planning for your funeral can be a difficult experience, but one that many of us will need to go through at some point in our lives.

"It's shameful that there are those out there who look to prey on people when they are in this often emotional and vulnerable state. That's why I've taken the decision to regulate prepaid funeral plans, so people can have more confidence in the products they're being offered and peace of mind that their affairs will be handled correctly."

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