Watchdog rings death knell for rogue funeral plan companies by bringing in regulation to clamp down on controversial practices
- Funeral plans will be regulated from today following a big industry clampdown
- Customers up until now had no protection should something go wrong
- A 2018 FCA investigation exposed evidence of widespread misselling of plans
- Now every provider must be authorised or must otherwise cease to trade
Funeral plans will be regulated from today following a major industry clampdown on controversial practices.
But tens of thousands of customers are still at risk of losing vast sums after a string of firms went bust or failed to meet strict new checks.
Funeral plans, which typically cost £3,000 to £4,000, promise customers peace of mind that their loved ones will not be hit with big bills when they die.
But until now the sector was unregulated, leaving customers with no protection should something go wrong.
An investigation by City watchdog the Financial Conduct Authority (FCA) in 2018 also exposed evidence of widespread misselling and high-pressure sales.
Funeral plans will be regulated from today following a major industry clampdown on controversial practices
To stamp out rogue practices, the regulator said that as of today all providers must be authorised or cease trading.
Some 24 have been approved – covering 87 per cent of an estimated 1.85million plans sold.
But up to 16 are banned because they did not apply for authorisation or failed to meet new rules.
One Life Funeral Planning, which has 14,000 customers, had its application rejected amid concerns about ‘poor sales practices’.
To stamp out rogue practices, the FCA said that as of today all funeral plan providers must be authorised or cease trading
It has until October 31 to transfer customers to another provider or offer refunds, and cannot sell plans.
It comes after a major firm, Safe Hands, went bust in April.
Around 45,000 customers are waiting for their money.
Another firm, Unique Funeral Plans, with about 700 customers, collapsed this week, and will not refund any money.
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