With the rise of Direct Cremation following the Covid-19 pandemic, there has been an increase in new providers entering the funeral industry pushing the sale of low cost pre-paid funeral plans. You have more than likely seen their Sponsored Ads come up on your Facebook feed or on TV ads and billboards.
Prepaid funeral plans have grown increasingly popular in recent years as people look to ease the burden of their death on loved ones. In theory, a prepaid funeral plan allows someone to pay for a funeral at today’s prices, even though it may not happen for a number of years. A plan can be paid for up-front or in instalments.
However, with so much money at stake, the Australian Competition and Consumer Commission (ACCC) and various State Consumer Protection agencies have placed the funeral industry on notice by introducing greater regulation to protect unwary consumers.
Vulnerable may lose thousands to rogue operators
Whilst there has been greater scrutiny into the practice of the funeral industry here in Australia, there has been a similar story happening in Great Britain.
Since 2002, pre-paid funerals in Great Britain have been under the control of the Funeral Planning Authority (FPA). However, following an extensive government inquiry, the FPA will cease to exist from July 2022. Pre-paid funeral plans will now fall under the regulations of the British government’s Financial Conduct Authority (FCA).
Under the new regulations, all pre-paid funeral plan providers will need to apply to be authorised by the FCA. Any firm not authorised, will need to cease selling and managing funeral plans. It will become a criminal offence to continue to operate without FCA authorisation.
However, this may be too late for many consumers, with many Pre-paid Funeral Plan providers going out of business. In a recent article by This is Money [6 April 2022] it reported the demise of Safe Hands Plans, a pre-paid funeral firm based in West Yorkshire. According to the article, the FCA, has ordered Safe Hands Plans to stop selling new plans. Safe Hands Plans has been placed into administration and over 45,000 of Britain’s consumers may lose all their Safe Hands Plan prepaid funeral investment.
eziFunerals comment: The purpose of this article is to remind consumers about the need to do your homework before placing trust in companies that do not have a good track record in the funeral industry. Although most funeral providers do the right thing, not everyone in the market is behaving properly. In recent years there has been a rise of new players looking to make a quick buck from the prepaid funeral market. They make their money upfront with high administration fees, leaving you with less money invested, than the funeral is actually worth.
Our advice to our Clients is to make sure you shop around, as different funeral providers offer different packages. Get a breakdown of all the costs so you know exactly what you’re paying for before you hand over your cash.
eziFunerals supports individuals and families cope with end of life decisions, death and funerals. We are an independent, Australian-owned and operated company. We are not part of any other funeral company.
Our member Funeral Directors operate in Sydney, Melbourne, Brisbane, Perth, Adelaide and Australia wide. They are chosen for their knowledge, quality, service, personalisation and experience. They go above and beyond, and will take the time to support the family.
For more information or to make contact with a trusted Independent funeral director, call eziFunerals on 1300 236 402 or visit www.ezifunerals.com.au.