Government launches a Call for Evidence into the pre-paid funeral industry
Government launches a Call for Evidence into the pre-paid funeral industry
The Government have recently launched a Call for Evidence into the pre-paid funeral plan industry after concerns over the treatment of customers. See https://www.gov.uk/government/consultations/pre-paid-funeral-plans/pre-paid-funeral-plans-call-for-evidence (4 July 2018).
Part one of the Introduction says:
“Over the course of the past year, concern has grown about the potential risk of consumer detriment within the pre-paid funeral plan sector. While the demand for funeral plans has grown considerably in recent years, with data from the Funeral Planning Authority indicating that sales in 2017 grew by around 245% when compared with sales in 2006, the regulatory framework that was developed for the sector in 2001 remains unchanged.
“Citizens Advice Scotland and Fairer Finance have highlighted numerous failings in the sector, including a lack of clarity for consumers, high pressure and misleading sales activity and a lack of access to redress schemes if things go wrong. Fairer Finance has also raised doubts about the financial soundness of some trust-based providers. In light of this evidence, and following informal consultation with relevant stakeholders by HM Treasury, government has concluded that the current framework of self-regulation is not sufficient to ensure the fair treatment of consumers, and a more robust regulatory regime is needed.
“The government has launched this call for evidence to aid in the design of a more appropriate regulatory framework. Overall, the government’s objectives are that any regulation of this sector should seek to ensure that:
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all pre-paid funeral plan providers are subject to robust and enforceable conduct standards
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there is enhanced oversight of providers’ prudential soundness
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consumers have access to appropriate dispute resolution mechanisms if things go wrong
“Pre-paid funeral plans exhibit many of the characteristics of other financial services products, such as insurance products. The government is therefore minded to strengthen regulation in the sector by bringing all pre-paid funeral plans into the remit of the Financial Conduct Authority (the FCA). This call for evidence seeks views and evidence on the merits of this proposal and responses to the call for evidence will inform any amendments to the regulatory framework which the government may seek to make.
“For the purpose of this call for evidence, “funeral plans” should be taken to mean “pre-paid funeral plans”. The government is only seeking evidence in relation to the operation of this aspect of the funeral sector. This includes the conduct of both the sale, and provision, of pre-paid funeral contracts by both distributors and providers. The government is not seeking evidence in relation to the broader funeral sector or the quality or value for money of the funeral that is provided upon conclusion of the contract. In parallel to this call for evidence the Competition and Markets Authority has launched a market study into the supply of funerals in the United Kingdom.
“£The CMA’s market study will focus in particular on how competition between funeral directors works and transparency issues in the provision of funerals; it will also focus on how competition works in the crematoria segment of the industry.”
Read more at https://www.gov.uk/government/consultations/pre-paid-funeral-plans/pre-paid-funeral-plans-call-for-evidence