Watchdog sinks its teeth into rip-off funeral scams

PEOPLE buying funeral plans are to get protection from cold callers selling rip-off products under new plans to regulate the market.

Pre-paid funeral plans are designed to bring peace of mind, by allowing people to organise and pay for their send-off in advance.

Campaigning group Fairer Finance has warned that some providers have been harassing and misleading vulnerable people by pushing vastly overpriced plans.

They should get more protection from July 2022, when the Financial Conduct Authority (FCA) regulates the market. The FCA will insist plans are sold fairly and ban cold calling. Plans must also be fairly valued, with no additional fees or commission payments to intermediaries.

Consumers will also have access to the Financial Services Compensation Scheme and Financial Ombudsman Service from day one. Sheldon Mills, FCA executive director of consumers and competition, said: “It is vital that consumers have confidence their plan will deliver the funeral they expect at a fair value.”

Hargreaves Lansdown personal finance analyst Sarah Coles said funeral plans are not right for everyone: “Consider setting aside money in a savings account instead.”

Alternatively, aim to meet funeral costs by other methods, such as life insurance written in trust or workplace death-in-service cover.

If you already have a funeral plan, check your provider is applying for authorisation. Coles said: “If not, they may sell your policy onto another provider, or wind up and refund your premiums.”

You may then have to wait to get your money before making fresh plans, Coles said.