FCA Regulation for Funeral Plans
From 2022, all pre-paid funeral plans will be regulated by the Financial Conduct Authority (FCA). The move to regulate funeral plans comes after concerns were raised about misleading sales tactics. Plans for the Financial Conduct Authority to move in are set to be put into place from next spring. In the meantime, the regulatory body is drawing up plans on its proposed rules and the approach it will take to authorise firms. As plans remain to be finalised later in the new year, the City regulator has promised to engage with the funeral plans industry to forge a path forward.
A recent government investigation highlighted numerous problems blighting the prepaid funeral plan market sector. Last year, a call for evidence found that high pressure sales tactics were being used to convince consumers into taking out funeral plans. This was driven by commissions in the market, leading to conflicts of interests for intermediaries incentivised to sell funeral plans. Another problem, described as a “particular concern,” was the practice of cold calling. Currently, the industry is voluntarily regulated by the Funeral Planning Authority. However, following extensive investigations, current measures in place do little to prevent the problems prevalent in the industry.
A representative for My Funeral Plan Supermarket, a funeral plan price comparison website, stated: “We believe the decision for the FCA to regulate funeral plans is a step in the right direction. A small minority of unscrupulous prepaid funeral plan providers have historically resorted to shady selling tactics. At My Funeral Plan Supermarket, we welcome all moves by the government that help ensure customer satisfaction. Moreover, while details remain to be ironed out, we look forward to working with the government to restore the image of the sector. We’re still not quite sure how it will pan out, but we already operate to standards expected by the FCA from other regulated industries.”