SAIF Golden Charter

Non-FPA funeral plans

Malcolm Flanders talks about the risks of accepting plan allocations from non-Funeral Planning Authority providers

With the funeral profession and pre-planning industry under their most intense scrutiny, it is concerning to see several damning media articles appear due to the unscrupulous activities of planning companies outside Funeral Planning Authority (FPA) supervision.

These headlines undermine consumer confidence and reduce public trust in funeral directors beyond those businesses directly associated with inferior propositions.

Independents rightly hold strong views on malpractice, so it is particularly frustrating that some businesses, possibly unwittingly, fuel the problem by accepting allocations from non-FPA companies.  

Recently we have seen The Guardian and The Mail report malpractice and potential fraud, yet both companies highlighted have been trading for years.

This is Money

The Mail’s This is Money reported problems suffered by customers of Equitable Lifecare, which appears to have ceased trading when the sole director quit the business. The journalist was unable to make contact with Equitable Lifecare or its trust fund, which it had claimed would carry on paying funeral bills.

The FPA has been aware of Equitable Lifecare since 2016 and raised concerns with the Financial Conduct Authority (FCA). Sadly, despite the owner claiming he was shut down by the FCA in 2017, we have seen evidence of another case where a family continued to pay into the firm’s account until January 2019. This company has been reported to the police and Trading Standards, but it appears that this customer’s situation is unresolved and the worry is that further examples will emerge.

The Government is aware of the problems. When the Treasury announced plans to refer the sector to the FCA, Treasury Minister John Glen was very clear that the customer detriment was concentrated in companies outside of the FPA.

We’ve seen several companies accepted into the FPA recently; many were established firms that had seemingly chosen not to offer their customers the protections offered by the regulator. Fosters, Open and Safe Hands have each become registered providers in the last 12 months, but others continue to act outside of the supervision of the sector’s regulator.

The Guardian

Meanwhile The Guardian highlighted concerns around Prosperous Life, which claimed to be selling 1,000 plans a month, and has purportedly been reported to the Information Commissioner’s Office (ICO) by customers for alleged high-pressure sales tactics.

Funds belonging to some Prosperous Life clients reside in the Pride Planning Trust. This trust guarantees to allocate to a funeral director within 28 days and the Co-op and Dignity refuse allocations from non-FPA firms, so Independents must be agreeing to take on these plans.

Since 2016, SAIFCharter has recommended that members don’t accept plans from companies outside the regulatory framework. That advice stands. Problems likely to be uncovered with more comprehensive regulation will affect those funeral directors who took the plans on, and that will hit Independents’ wider reputation. If the conglomerates continue to view non- FPA registered plans an unacceptable risk, we believe Independents should seriously consider their own position.

Now is the time

Each funeral director must reflect on the potential risk to their company’s reputation, and to the profession, from non-FPA registered plans. Many already take this stance and do not accept such plans, but if you do so please review the situation and consider rejecting them.

Ironically, the situation is simpler when asked to take on a plan at the time of need. In that instance you can make a judgement on its true value, but it deprives the family and plan holder of the certainty of who will carry out the funeral.

No FPA provider will knowingly wait until the plan holder has passed to ask you to take a plan. Where you are asked to accept at the point of sale, you should be clear of the terms you are signing up to and where potential liability may sit, should the circumstances of the provider change in the future.

Golden Charter respects your right to make independent business decisions, but we believe that FPA registration continues to serve an important purpose, demanding minimum standards from planning companies and protecting the customer in the way families are regularly told to expect.