FCA to ban cold calling as it confirms funeral plans overhaul

by | Jul 5, 2021

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The Financial Conduct Authority has confirmed how it intends to regulate the sale of funeral plans, including a ban on cold calling, when it assumes responsibility for the market next year.
Funeral plans allow people to pre-pay and pre-arrange funeral arrangements, through either a lump sum or instalments, thereby saving friends and family the cost.

Firms that sell them are regulated on a voluntary basis by the Funeral Planning Authority. But following the introduction of government legislation earlier this year, the sector will fall under the FCA’s remit from 29 July 2022, which is when its new rules will come into effect.

They include guaranteeing instalment plans always deliver a funeral, an end to cold calling, improved standards on advertising, and banning commission payments to intermediaries. Firms selling funeral plans will also be subject to checks on their fitness to operate, while those that are unable to guarantee funerals will be delivered will be banned.

The FCA said firms should either ensure they are ready for the new regulatory regime or quit the market.

Sheldon Mills, the FCA’s executive director, consumers and competition, said: “Funeral plans should provide customers with comfort and certainty that their affairs are in order.

“Our new rules will drive up standards and ensure that when consumers buy a plan, they receive a product that matches their needs and expectations.

“Firms must now plan for this new regulatory regime, or prepare to leave the market in an orderly fashion.”

The FCA warned that people would not be able to complain to the Financial Ombudsman Service, nor would they be protected under the Financial Services Compensation Scheme, if they took out plans before 29 July 2022.

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