Funeral providers face government crackdown to protect vulnerable families from being ripped off

Elderly people are being 'pressured, hassled and misled' by unscrupulous firms, according to research by Citizens Advice and campaign group Fairer Finance

Sales of funeral plans more than tripled between 2006 and 2017 (Reuters)

Rogue providers of prepaid funerals face a crackdown under new Treasury proposals amid fears that vulnerable families are being “ripped off”.

The Treasury has proposed that the fast-growing market for prepaid funerals be regulated by the Financial Conduct Authority (FCA). Currently, an industry body with no statutory powers regulates 95 per cent of the market while other funeral providers are not regulated at all, meaning that customers can pay thousands of pounds up front but have few legal protections.

Separately, the competition watchdog said on Friday that it would investigate the wider £2bn funeral market to ensure that people are not getting a bad deal.

The average cost of a funeral has spiked to almost £3,800, with “extras” amounting to £2,000, the Competition and Markets Authority (CMA) said. The CMA will assess whether funeral firms are giving customers enough information to make the right choice.

Elderly people are being “pressured, hassled and misled” by unscrupulous firms, according to research by Citizens Advice and campaign group Fairer Finance.

The Treasury says it is launching a consultation process to prevent people being “ripped off” when they are at their most vulnerable.

Economic secretary to the Treasury, John Glen, 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 leave their grieving families out of pocket.”

Sales of funeral plans more than tripled between 2006 and 2017, but the regulations have remained unchanged since 2001.

The CMA’s investigation will look into whether funeral providers are providing clear information on costs and services. It will also look at how prices have changed over time.

Commenting on the Treasury’s proposals, Simon Cox, from funeral provider Dignity, said: “It is excellent news that the government has decided to do something about mis-selling in the funeral plan sector.

“Our research has shown that bad practices like persistent and pushy cold-calling are rife among firms that have no oversight from a regulatory body.”

Shares in the FTSE 250 funeral company, Dignity, crashed more than 14 per cent after the announcements.

James Daley, managing director of Fairer Finance, said: “People who buy funeral plans are not around to measure delivery against their expectations, which is why it’s so important there are clear rules around how companies must behave. And with most plans costing over £3,000 – it’s important that customers can have total confidence that their money is safe.”