Following the 29th of July, the Financial Conduct Authority (FCA) has regulated pre-paid funeral plans and is authorising 26 providers following legislation passed by parliament. These providers will therefore make up 87% of the market as they hold 1.6 million plans across the UK. Due to the regulation of the sector, the FCA states there will be higher standards and boosted consumer protection.
The new rules following the regulation include:
- A ban on cold calling.
- A ban on commission payments to intermediaries such as funeral directors.
- A requirement for a funeral plan is to deliver a funeral unless the customer dies within two years of taking out the plan, in which case a full refund will be offered.
The Financial Services Compensation Scheme (FSCS) is accessible by customers of authorised providers so that if their provider fails, their money is protected.
If consumers want to complain about an issue that happened before July 2022, they can make a complaint directly to the Financial Ombudsman Service if the firm was registered with the Funeral Planning Authority at the time the issue occurred.
The FCA has also stated that the 13 firms that applied to be an authorised provider before 1st March 2022 that have not been authorised yet, have until the 31st October to transfer their plans to authorised firms or to refund their customers. These plans aren’t covered by the FCA’s new regulation which means there is no protection by the Financial Ombudsman Service or the FSCS until they are transferred to authorised providers.
Emily Shepperd, executive director of authorisations at the FCA, said: “With our new rules in place, consumers will be better protected when they need it the most.
“It is unfortunate that a number of firms chose to exit the market, leaving customers, who had sought peace of mind for their loved ones, understandably worried. It is a good outcome for consumers that some providers have stepped in to provide funerals for the customers of these providers at short notice. We also continue to engage with the industry while it works on a longer-term solution.”
The announcement follows the confirmation of the FCA’s plans to introduce a new customer duty from July 2023 which will apply to funeral plan providers and mean their customers will receive better communications, products and services they most need with the fairest value and customer support whenever they need it.
List of providers the FCA is authorising today:
- Alternative Planning Company Limited (this includes Choice and Choice funeral plans from Funeral Partners)
- Avalon (Europe) Limited
- Avalon Trustee Company Limited
- Celebration Of Life Planning Ltd
- Central England Co-Operative Limited (this includes CEC FPL and CEC Funeral Plans)
- Co-Op Funeral Plans Limited (this includes Co-op Funeral Plans and Co-op Funeralcare)
- Crystal Cremations Ltd
- Dignity Funerals Limited
- Distinct Funeral Plans Limited
- Ecclesiastical Planning Services Limited (this includes Perfect Choice Funeral Plans)
- F A Albin & Sons Limited
- Family Funerals Trust Limited
- Freeman Brothers (this includes Peter Christopher Freeman and Brigid Mary Freeman)
- Golden Charter Limited (this includes Golden Charter and localfuneral.co.uk)
- Golden Leaves Limited
- Haven Personal Funeral Plans Ltd (this includes Haven Personal Funeral Plans and Haven)
- Independent Funeral Planning Services Ltd (this includes IFPS and The IFPS)
- Low-Cost Funeral Limited (this includes Affordable Funerals and Memoriafunerals.co.uk)
- M&F Funeral Services Ltd (this includes M&F Funeral Services)
- Open Prepaid Funerals Limited (this includes Open Prepaid Funeral Plans and Open Funeral Plans)
- Peace Burials Limited (this includes Peace Funerals)
- Plan With Grace Limited
- Pure Cremation Funeral Planning Ltd
- Southern Co-Operative Funerals Limited (this includes Southern Co-op and The Co-operative Funeralcare)
- The Independent Family Funeral Directors Ltd (this includes Fosters Family Funeral Directors)
- William Alty & Sons Limited