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family funerals trust

Complaints about Prepaid Funeral Plans: It Does Happen: What To Do

funeral plan complaints

Normally, we don’t hear any complaints about funeral plans as they do their job smoothly.

However, there are two areas currently causing concern and keeping us busy trying to help, even though we have no direct involvement.  PLEASE don’t call us when you have problems, but we are always interested to know if you would be kind enough to email us using the form below.   So, the two major problems are:

  1. Funeral Plan Complaints: plans sold by phone.

We do not agree with plans being sold by phone in the first place.  But we are getting lots of calls about companies being slow to repay amounts paid ranging from £50 to £3,000 where the client cancels within the required period which typically ranges from 14 to 30 days.  Perhaps they actually read the Terms and Conditions when they finally arrive and discover the plan is not all the salesperson said it was, or maybe they just realised it was not a decision which should be made in haste.

Anyway, our advice is to phone the company immediately if you want to cancel in the initial period when you can get your money back, and take the name of the person you speak to.  Then follow it immediately with a letter, mentioning the name of the person you spoke too. Keeping a copy of the letter, and ideally, send it recorded delivery. Be aware that the procedure for retrieving cash from Trust Funds or Insurance Funds is not immediate, so as long as your refund request is acknowledged in writing or by email from the actual provider, you may need to be a little patient. It could take as long as 5 weeks or so.

2. Complaints about Funeral Plans affected by Coronavirus.

These are a different kettle of fish: many funerals have been affected, and it has been impossible to deliver the full funeral the deceased had paid for.  Not all funeral plan companies are Regulated by the Funeral Planning Authority, so they can’t help with unregulated ones.  See the providers review which should indicate if they are. We approached the Funeral Planning Authority for a statement, and this is what they said:

“What happens when some element of the plan cannot be delivered? The Funeral Planning Authority has not issued any specific guidance largely because trying to make rules to address the number of different potential situations was likely to lead to more unintended consequences.  However, if there is an element of a plan that cannot be delivered we would expect FPA registered providers to treat their customers fairly and provide an alternative service or an appropriate refund for the element of service not delivered.  For any customer or family with issues, who have plans with FPA registered providers, our advice is to have the conversation with the provider in the first instance. If that doesn’t address their concerns then to raise a formal complaint with the provider and if that is not resolved then complain to us. There is a form on our website that can be completed ( https://funeralplanningauthority.co.uk/contact-us/complaint-form/ ) or email us at info@funeralplanningauthority.co.uk .”

Clearly, not all firms are FPA Regulated, but their recommendations are perfectly reasonable.  Where the firm is unregulated, you might wish to approach the local Trading Standards Office  but you should first have complained about the fact that the funeral plan was not fully fulfilled and no sensible alternative offered, by telephone and  in writing to the provider.  Some funeral directors will actually have dealt with the matter already, by allowing extra flowers, printing or an upgraded urn etc.

We cannot resolve complaints about funeral plans, but we are interested in your experiences, so please let us know about them.

Fairer Finance Reports on the Funeral Plan Market.

This report was sponsored by Dignity, who are the dominant force in the UK Funeral Plan Market, and in the Funeral Director market.  Both their funeral plans and their funeral directors are expensive.   They have seen their market share drop substantially over recent years and would like to make life difficult for the upstarts.   Worst still some of these upstarts do things differently.  Even worse, some of them are supporting independent funeral directors because they are much cheaper.   And, for Dignity, if not for consumers, it gets worse.

One of the new breed of funeral plan companies is actually helping to train and set up new funeral directors and deliberately helping them to cut prices to end users.   That will obviously have a massive impact on Dignities profits in the long run.

So please do read the report with that in mind, and remember that not everyone wants their plan to include environmentally unfriendly embalming (to preserve the body) or limousines when the family can use their own cars and divert hundreds from Dignities pockets.   According to Dignity, everyone wants a service.  We have news – it is a free market (still) and people can make their own choices.  yes, they need to understand them, and anything which helps with that is to be welcomed.

One thing Dignity does not support is independent advice on the choice of funeral plans.  They prefer to give vast commissions to people who can only sell their plans – from what we understand, they may earn 50% more than we do and they don’t have to do any research! Nor do we have salespeople or a call centre!! But here is the Fairer Finance Press Release: (get the salt out!)

Unregulated funeral plan market leaves millions of pounds of consumer money at risk.

New Fairer Finance report says perfect storm is brewing of misleading sales practices, lack of consumer understanding and lack of regulation in prepaid funeral plan sector. Regulation is urgently needed to prevent a Farepak-style scandal.

Independent consumer group, Fairer Finance, in partnership with Dignity Funerals, has published a report calling for stronger regulation of the funeral planning industry.

The report, “Is the prepaid funeral planning market working well for consumers?” suggests there is significant evidence of mis-selling within the industry and that millions of pounds worth of consumers’ money could be at risk. Although the report was commissioned by Dignity, Fairer Finance retained full editorial control.

Read the full report

Funeral plans are an effective way for consumers to plan and pay for a funeral. Between 2006 and 2016 there has been a near fivefold increase in the number sold each year. As a result 1.2 million UK consumers now own a plan. It is believed that a significant proportion of this growth is due to websites purporting to be comparison sites combined with high pressure telesales tactics.

Funeral plans look and feel like a financial services product, but 75% of consumers wrongly believe their plan is regulated by the Financial Conduct Authority.

The report shows:
• There is evidence of persistent and high pressure sales practices often through aggressive third party sales intermediaries. A telephone survey of 1,001 adults over the age of 50 indicates that as many as 6 million people have been marketed to by funeral plan providers or their agents and nearly half (49%) of those contacted over the phone have been re-contacted 2 or more times, 46% agreed that they were being pushed to take out a plan when re-contacted and 63% felt this additional communication was not ‘useful’.

• Lack of clarity – Consumers do not understand the differences between plan types, are confused by industry terms and are unaware of the potential for and scale of extra costs, and other product exclusions. Over 90% of those identified as contribution style funeral plan holders wrongly thought their plan guarantees to pay for cremation costs when this was not the case.

• Mismatch of customer expectations – The research demonstrated that consumers tend not to understand what is and isn’t guaranteed by their plan. Customers buying these plans are often elderly and more vulnerable and not around to check whether the product met their expectations when a claim is made.

• Safety of consumer money – There is very poor transparency around what happens to customer money. While all money must be placed in a trust, or a whole of life policy, few providers are explicit about funding levels and where the money is invested. There is no safety net if a provider was to become insolvent.

• Lack of consumer protection – The industry is subject to voluntary regulation by the Financial Planning Authority. Some providers are not part of this voluntary regulation scheme. Third party sales firms are not even subject to voluntary regulation. Consumers do not have access to an Ombudsman service in the event their complaints are not resolved satisfactorily.

James Daley, Managing Director and Founder, Fairer Finance, said; “Funerals have become ever more expensive over the past decade, and pre-paid plans can be a great way of locking in today’s prices, whilst also ensuring your family isn’t left with this significant financial burden after you’re gone. Although there are some reputable providers working in the interests of consumers, the sector has rapidly expanded over the last few years, with our research revealing a worrying number of conduct issues and lack of consumer protection.

“The combination of a fast growing market fuelled by high pressure sales to a potentially vulnerable customer base is creating a perfect storm. A growing number of customers are likely to be let down when their plan is claimed on – with some funeral plan providers passing on significant extra costs to the families. And there is a concern that client money is not always being adequately looked after. Without intervention, we may yet see a Farepak-style collapse in this market, which leaves thousands of customers out of pocket.”

Simon Cox, Head of Insight and External Affairs, Dignity, commented;
“The sector is evolving into a two-tier market; those committed to offering quality products and services, versus those willing to “sell at all costs”, without strong governance or worry about fair customer outcomes.

“We believe a governance gap is responsible for an explosion of online and telesales organisations who have moved on from PPI and accident claims management into funeral plans. Our worry is that this situation is not sustainable, and before too long poor practice will result in one or two struggling to fulfil their obligations, leaving the rest of the sector to deal with the debris.”

Dignity and Fairer Finance are committed to working positively with consumers, government regulators and partners in the industry to explore these recommendations and encourage other plan providers to do the same. It is hoped that over the coming months, an improved consumer environment in the sector can become a reality.

Read the full report