Funeral providers face ‘rip-off ’ prices inquiry

THE competition watchdog has launched an inquiry into the £2bn funerals market amid fears that bereaved families are being ripped off.

The Competition and Markets Authority (CMA) plans to examine whether funeral directors are “clear enough” when explaining prices to often “very emotionally vulnerable” customers.

The average funeral bill is almost £5,000 when extras such as burial plots are included, forcing many people to take on debt. So-called “funeral poverty” hit a record £160m last year.

The CMA will also look at the soaring cost of cremation fees, which are now estimated to account for around 75pc of all funerals. In a further blow to the sector, the Government is looking at toughening up the rules around the pre-paid funeral plan industry amid concerns that some outfits have pressured people to buy.

One proposal is to bring the sector under the watch of the Financial Conduct Authority (as pre-paid funeral plans “exhibit many of the characteristics of other financial services products, such as insurance”.

Shares in funerals giant Dignity plunged 13.6pc to £10.50 yesterday following the announcements. It is one of two major players in the sector, along- side Co-op Funeralcare.

“The [pre-paid funeral plan] market is self-regulated with limited control, so poor sales practices and customer care issues in certain areas have failed to be addressed,” said Ashley Shepherd of later life specialist Over50choices.

Catherine Powell, of Pure Cremation, said the review of pricing would “open up the conversation about what people actually want, need and value when it comes to saying goodbye to a loved one”.

Funeral providers have been under pressure to slash costs as consumers shop around for better deals and opt for budget funerals. West Midlandsbased Dignity warned in January that its profits would be lower than expected after it was forced to cut prices.

‘Poor sales practices and customer care issues in certain areas have failed to be addressed’