Britain’s £2 billion a year funeral industry has become the subject of two separate investigations into how it carries out its business.
The Competition and Markets Authority (CMA) is reviewing the cost of funerals while the Treasury is focusing on concerns over pre-paid funeral plans.
The CMA is looking into the cost of funerals in general, wanting to ensure that grieving relatives have access to clear information on prices and levels of service. They will also question whether consumers get a fair deal on cremation prices.
The average cost of a funeral in the UK last year was nearly £3,800, but some families have been left trying to find a further £2,000 because not everything is included in the standard funeral plan. Embalming, limousines, the funeral service, burial plots and memorial stones all come as extras.
CMA senior director Daniel Gordon said: “People can understandably be very emotionally vulnerable when planning a funeral.
“We therefore think it is important that – at what can be a particularly challenging time – the process is made as easy as possible.”
The authority plans to produce an interim report by the summer of next year with the final report being published six months later.
The Treasury is concentrating its attention on complaints about pre-paid funeral plans and tougher regulation of the industry.
It will also consider a suggestion from consumer group Fairer Finance that the Financial Conduct Authority (FCA) should be asked to regulate the market as the plans are insurance investment products.
The probe will look at whether the 1.3 million who buy a pre-paid plan each year are getting value for money.
Some companies have been accused of misleading advertising, aggressive cold-calling and telesales and offering little customer protection for the money invested if the firm folds.
Plans cost between £3,000 to £4,000 and are typically paid for in monthly instalments. However, campaigners say many people may not be aware of hefty administration fees charged by some providers acting as middlemen between the customer and the funeral director – sometimes as high as £1,000,
James Daley of Fairer Finance said: “This announcement is only the start of the process, but it sends a clear message to those companies who are not acting responsibly that now is the time to clean up or exit the market.
“People who buy funeral plans are not around to measure delivery against their expectations, which is why it is so important there are clear rules around how companies must behave.
“Customers who buy funerals are grieving and have no idea what a fair price for a funeral is. And sadly they have proved far too easy to take advantage of. This market needs tighter regulation and better protections for consumers.
“Everyone will need a funeral eventually, and it’s important that we can be confident we are paying a fair price for a good quality service.”
Current regulation is the responsibility of the Funeral Planning Authority (FPA) which has limited powers to punish abuses.
A spokesman said it was confident the review would prove the effectiveness of its work and that regulation by others would lead to less choice, higher costs and ‘a less dedicated oversight of the market’.
He said: “We continue to raise awareness among customers about how important it is to buy a funeral plan from an FPA registered provider. Only these providers will have undergone stringent checks and will be operating to an agreed set of standards, designed to protect the customer.”
But one of Britain’s top funeral bosses has admitted the industry has taken advantage of people’s grief in the past.
Steve Murrell’s of the Co-op Group – Britain’s largest provider of funeral services – said price wasn’t on the agenda when people were arranging a funeral which had led to ‘wrong behaviour in the industry’.
He said: “For too long the industry kept putting prices up. People felt obliged to spend it – they kind of felt it represented the importance of that person’s life.
“But 12 to 18 months ago I felt we needed to make funerals more affordable for people at a time of austerity and of sorrow.
“We think this market needs regulation. This is a caring market that needs to provide the best service at the most difficult of circumstances.
“You or I could open up a funeral business tomorrow with no qualifications or regulation. It’s crazy.”