The government has introduced new measures to regulate the pre-paid funeral sector to tackle what it called ‘shameful’ high pressure sales tactics being used by some companies.
The first clampdown in the sector for nearly 20 years is designed to ensure the market, which a number of mobility retailers serve, is competitive and protect consumers, who are often old and vulnerable.
The regulation of the sector will now be overseen by the Financial Conduct Authority (FCA). It will design a new framework to bring regulation in line with other financial products, such as insurance, and ensure that providers are clear and fair in their treatment of customers.
The move comes after a recent call for evidence showed widespread concerns around the conduct of funeral plan providers, with some employing high pressure and misleading sales tactics in order to get customers to sign up to plans.
Under these new plans, anyone found breaching the regulations can have their authorisation revoked, face fines and even criminal charges.
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 pre-paid 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.”
Demand for funeral plans has grown by nearly 200% between 2006 and 2018. Last year, 177,000 plans were sold and cost on average between £2,500 and £5,000. The legislation governing their oversight has not changed since 2001.