Published: Sun, June 03, 2018
Markets | By Otis Pena

Watchdog to probe prices and 'confusing' information in £2bn funeral market

Watchdog to probe prices and 'confusing' information in £2bn funeral market

The Government and a competition watchdog are to launch joint investigations into whether people are getting at fair deal on funerals, amid concerns about soaring costs.

Businesses who prey on the vulnerable with "rip-off" pre-paid funeral plans could soon be hit with tougher regulation under a crackdown by the Treasury.

'There are a number of options open to the Government and we will be recommending that the Funeral Planning Authority is put on a statutory footing to compel all organisations selling funeral plans to be regulated.

Now 95% of the market is voluntarily regulated by the Funeral Planning Authority (FPA), which lacks the power to prevent providers from trading, according to ministers. But this self-regulatory body doesn't have the power to prevent providers from trading and its code of practice isn't legally binding.

Shares in funerals giant Dignity plunged 14pc on Friday morning following the announcements.

However, nothing has been done to regulate the industry since 2001 and the government is concerned that consumers are being ripped off, pressured, harassed and misled by some rogue providers following research conducted by Citizens Advice Scotland and Fairer Finance.

John Glen, economic secretary to the Treasury, said: "I'm appalled by the lengths that some dishonest salesmen have gone to in order to sell a funeral plan".

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'Tougher regulation will ensure robust standards are enforced for all plan providers and protect individuals and their families if things go wrong'.

The Competition and Markets Authority is to look at issues including the rate at which funeral directors have raised prices in recent years.

Separately, the Treasury has announced that it is launching an investigation into the pre-paid funeral sector - around 1.3 million people in the United Kingdom have a pre-paid plan - responding to bad practice in the industry. "We want to ensure people can at least receive clear information on prices and the services making up a funeral, and that people get a fair deal on the cremation fees charged".

As part of its investigation the CMA will look at the soaring cost of cremation fees, which are now estimated to account for around 75pc of all funerals.

Last year, the average cost of a funeral rose to £3,800, excluding extras, which can add a further £2,000 to the total cost. "We therefore think it is important that, at what can be a particularly challenging time, the process is made as easy as possible".

The Competition and Markets Authority says "emotionally vulnerable people" are not being given clear information about prices and services.

Across the country, the funerals market is estimated to be worth £2billion and there are 5,000 funeral director branches and 294 crematoria in operation.

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