Conservative MP warns against ‘watered down’ funeral plan industry regulation
The funeral industry must not prey on fear, Conservative MP Lucy Allan told MPs during a recent parliamentary speech.
The Yorkshire Post published an excerpt of the speech by the MP who represents Telford in Shropshire and who sits on the Health and Social Care Committee. Ms Allan drew attention to predatory practices by certain elements of the funeral plan industry, who often target older people who might be worried about the costs of funerals.
She told parliament that the funeral plan industry has grown extensively in recent years, with some 1.6 million people now holding a funeral plan and some 218,000 taking out a new plan last year and more than £4 billion in funds under management held in those plans.
Good providers out there
The industry remains, however, unregulated. Ms Allan said that the Funeral Planning Authority claimed that it provides oversight, but this was still not regulation. It was worth remembering, she added that there were good providers such as Dignity and Co-op Funeralcare and that they would be regulated by the Financial Conduct Authority by 29 July.
However, other providers have still not applied to be regulated and others have not been accepted for regulation. Concerns had been raised about where that would leave people who held plans with those providers.
She warned that the industry had a record of using high-pressure sales techniques, such as cold calling and having reps sit in people’s homes until they had signed on the dotted line.
‘Extraordinary’ fee arrangements
There were also extraordinary fee arrangements where 25 percent of the plan could be taken as a commission and the use of intermediaries, such as will writers who then sold funeral plans when all someone wanted was a will.
A lack of transparency about how the money was invested was also a concern and those providing plans often played on people’s fears, telling them that a funeral plan was essential when people could simply save the money themselves and make it clear to their relatives what they wanted to happen when they die.
Ms Allan said she was worried that industry lobbyists were seeking to water down the FCA regulation proposals. If the proposals were watered down, it would become easier for companies to be regulated and that might not give consumers the level of protection needed.