It pays to be open

words: James Daley, Fairer Finance
James Daley

Making the right choices when you’re buying a funeral will never be an easy task. Even if you’re holding up well emotionally after your recent bereavement, there’s a lot to learn in a short space of time, and many decisions to make.

Sadly, the funeral industry also continues to make it more difficult than it needs to be, by not publishing clear breakdowns of prices online. Although many are starting to put some kind of price on their websites, it’s often top level costs for bundled packages – making it hard for customers to see what the price will be to build a package that suits their needs.

I first got involved in the funeral sector four years ago when my mother passed away. I wanted to organise the funeral myself because I was curious to see how difficult it was for consumers to make good, informed decisions. I’ve spent my career as a financial journalist and campaigner, sticking up for consumers when they’re buying complex financial products.

In banking and insurance, customers often end up paying more than they need to because products are complex – and it’s hard to understand what the real cost is. It struck me that funerals were likely to be very similar – and that the difficulty for consumers would be compounded by the fact that they were buying these expensive products at a time when they were at their most vulnerable.

My experience back then was, I’m sorry to say, as bad as I had feared it might be.

From the moment my mother died, we started incurring cost – as her body was taken away to a local funeral director with whom the care home had a relationship.

When I began to shop around for funeral services the next day, I realised that if I didn’t stick with the funeral director who had taken my mother, there would be a cost to transfer her elsewhere.

As I continued my research, I quickly discovered there was very little information online about prices. And as I began to call local funeral directors, I was given the prices of packages that varied wildly. It was almost impossible to compare the different options on a like-for-like basis.

My suspicions about value were heightened when one funeral director told me about their “simple funeral”, and then went on to tell me about the other packages which started at almost double the cost.

When I began to drill down into the difference between these packages, I discovered that the simple funeral had an MDF coffin and did not allow me to choose the time of the service. In every other respect, it seemed to be identical to the other packages that were double the price.

And when I started to express an interest in buying the simple funeral, the funeral director intimated that these were “usually for people…” – at which point she stopped. I filled in the gap in my head with “on benefits”. As if to say, if you’ve got the money to pay more, you should do.

At this point I took matters into my own hands and rang the crematorium myself, to see whether I really was restricted to very inconvenient times for our service. As it happens, they were happy to accommodate me at a time that worked for my family. So the issue on timing appeared to have been an artificial barrier constructed by the funeral director.

So in the end, it seemed to come down to the type of coffin I had. And while the term of simple funeral didn’t allow me to upgrade the coffin, it occurred to me that an MDF coffin covered in flowers would look almost as nice as one made of better quality wood. Given that we would see it for only a few minutes before it was sent to be incinerated, I was happy to save our family the considerable cost of upgrading.

After the whole experience was over, I wrote a column in The Telegraph – and was surprised how many people got in touch to tell me they had been equally befuddled and frustrated when arranging a funeral. The lack of transparency and clear pricing felt like an unnecessary – indeed, indefensible – barrier in the way of consumers.

After my experience that year, my organisation Fairer Finance began meeting funeral directors and starting to bang the drum for transparency in the sector. Then in 2017, we were engaged by Dignity to do some research looking at whether the pre-paid funeral plan market was working well for consumers. Although Dignity paid us to do the work, we retained full editorial control and independence – including the right to criticise Dignity (which we did).

The issues of transparency were just as bad in that sector – and arguably the stakes are much higher for pre-paid customers as they aren’t around to see whether what they paid for lived up to their expectations.

After launching our campaign to get the pre-paid funeral plan market regulated, we met with the Treasury and eventually the Economic Secretary, who agreed to bring the sector under the wing of the Financial Conduct Authority.

At the same t ime, the Competition & Markets Authority (CMA) announced an investigation into the at-need funeral market. And what we’ve seen come out of its work so far shows that it is sympathetic to our concerns around the lack of transparency.

Rather than waiting for the CMA to report, I was pleased to be invited on to a voluntary industry working group – the Funeral Service Consumer Standards Review – which is looking to improve standards in the market now.

One of the strands we’re looking at is how to improve transparency – and I’ve been surprised that there’s still a significant number of firms who are resisting the call to publish prices on their websites.

The argument tends to be that if funeral directors publish prices online, the sector will end up in a race to the bottom on price.

And yes, more price transparency will provide more price competition. But surely it’s right that consumers are able to understand what they’re paying for. The current state of affairs means that many consumers end up paying hundreds or thousands of pounds more than they need because they don’t have all the information they need to make the best decision.

I’ve got no problem with consumers paying top dollar for their funeral, but that higher cost needs to be linked to higher quality service – not simply a result of them being unable to make meaningful comparisons.

Nevertheless, I’m sympathetic to the view that if we’re to have transparency on price, we also need transparency on quality. If you’ve invested in brand new hearses and limousines, and have state-of-the-art refrigeration facilities on site – it’s easier to justify your higher prices.

So as well as getting firms to publish prices, we also need to see them publishing details about their facilities.

In an ideal world, it would also be nice to have reliable customer reviews – though these can be hard to come by.

As things stand, things are still much too difficult for customers. Sites like Beyond, Funeral Guide and localfuneral. are doing what they can to try and help consumers compare on price. But too often, the prices that are displayed on these sites are wrong or not itemised.

In these cases, a little information can be more damaging than a lot.

The CMA is set to publish its final report this year, and I think it’s highly likely that it will recommend that funeral directors are forced to publish a breakdown of prices and facilities on their websites.

But CMA reports tend to take a long time to turn into actions. With a backlog of legislation, owing to the parliamentary burden of Brexit, it’s possible that it may be several years before we see the recommendations of the CMA become law.

In the interim, I’m hoping that the FSCSR can persuade the industry to improve transparency by providing templates that can be used to disclose information.

The likely problem is that while many funeral directors may agree to the recommendations of the FSCSR, many will not. So it won’t be until the CMA rules become law that the sector sees the transformation it needs.

I continue to believe that responsible funeral directors with good facilities and fair prices have nothing to fear from greater transparency in the sector. It should give them the chance to compete on a level playing field – and ensure that the winners are those who offer the best value and service.

If you count your business in that bracket, I’d urge you to start publishing your prices today – and start setting the example that your peers can follow. Most funeral directors are responsible and trustworthy businesses – but there continue to be pockets of poor practice, just as there are in all sectors. Only by embracing the disinfectant that transparency and sunlight brings will this sector flush out those less reputable businesses.

Click here to hear James go into more depth about his views on the Partnership Podcast.

James spoke to SAIFInsight prior to the changes COVID-19 has introduced to the funeral profession. As such, future changes he discusses including the regulatory timeline and the work of the FSCSR have since been impacted.

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