Miss-selling Funeral plans and deception

Many funeral plans are miss sold on the basis that the costings are inaccurate and the choice of funeral director and services is not what was sold.

One such situation just took place where a customer purchased a prosperous funeral plan having been told the cost covered everything they needed and they could choose their funeral director.

On closer inspection, the cost is massively short and only includes a contribution towards third party costs and is limited to one funeral director in the local area.

I believe this highlights several issues currently within the prepaid funeral plan market.
1: the sales networks of funeral plans should not include parties that know very little about funerals, their costings and disbursements and local prices of cemeteries and crematoria.
solution: If only the end service provider sold the funeral plan, they would be fully conversant in the costings associated to the service and the service level required. Unethical relationships between sales networks and funeral directors would be null and void and commission related sales by third party sales networks would cease.

2:The lack of highlighting what is truly covered and what is not truly covered; transparency of pricing.
solution: Structured pricing and explicit explanation of what is and is not included, service and costing wise. IF the disbursements are not covered then explain that and if they are explain how much they are and that they may still increase above inflation and not be met. An alternate solution to this is to only sell funeral insurances or funeral policies that do not guarantee and are not tied to a funeral director. Make them purely a financial package where money is put in trust and then called upon, when death occurs.

This particular situation had a family grave where the deceased would be a non -resident (Liverpool City Council charge a much higher rate than if you are a resident) and the plan was short b y nearly a thousand pounds at the very beginning! This kind of situation happens all the time and as transparent, honest, service driven, family run funeral directors, we are left explaining why we are cheaper for higher service and more choice.

On this particular occasion the customer had been told by another funeral director that they disallow chapel visiting and that the funeral director tells them the date and time of the funeral! This is not how we should be operating. We are there to care and provide, explain and present options, then make it happen how the family would like.

The CMA and unethical relationships

One of the items being investigated by the Competitions and Marketing Authority within the funeral sector, is unethical relationships between funeral directors and targeted organisations. Such organisations that a Funeral Director might target, would be nursing homes or hospices. This is a dreadful situation and any unethical relationship between two such organisations brings shame on the whole industry. WE firmly believe that a quality, value for money Funeral Director, would be chosen on the merit of his work, his care, his empathy and sympathy and the dignity and professionalism with which he carries out his work. There should never be any cause for a Funeral Director to have any unethical relations with other organisations that would provide work for him.

I also believe this opens the door and poses the question of; how regulated are nursing homes and hospices? Surely they have no business in persuading a bereaved family towards a favoured funeral director. The issues we hear are that some gain gifts and others gain cash commission for their persuasions. Surely their should be an ‘end of life’ plan with all nursing homes which details the family’s chosen funeral director? Why are these organisations not regulated in this way?
The conclusion of all of this is that these immoral and unethical relations should never exist. Family’s deserve the choice and their choice should then be respected.

We have recently had to deal with such an unfortunate situation. The family called us and asked what they can do as another funeral director had collected their relative and was stating he must charge for all manner of things, which to our mind would be optional. We have given the family our advice and await their return call. Funeral Directors should not be collecting relative’s on the instruction of the nursing home, without the family consent. This is why an ‘end of life’ plan should exist and should be what the family decide, not the nursing home.

Let’s hope the CMA tighten up on this and stipulate compulsory government regulation for all funeral directors and also look into the nursing home regulations.

Prepaid Funeral Plans

I could write a whole essay about this topic. It is often difficult not to go off at a different tangent when discussing the numerous complexities of funeral plans and their infrastructure.

The CMA are investigating funeral pricing and practices. They are barely skimming the surface of the prepaid funerals which are, in long term, going to have the biggest impact on the funeral sector, in time.

1 in 3 people in the near future will have a funeral plan in place. The plans are in essence a financial package, dressed up to be a funeral and to tie a funeral director into his prices. They are a great thing for the client and the family. They are a great thing for the financial service that provides the plans financial side of things. They are not a great thing for family run independent funeral directors.

As an independent we pay annual fees to products like Golden Charter. Golden Charter have a lot of financial ‘clout’ and can set their prices and set the plans growth value to the funeral director when the product (funeral) is required. Funeral directors also pay a fee to Golden Charter when the plan is taken on and the family also pay an ‘admin’ fee to Golden Charter when the plan is taken on. Golden Charter is only one of many numerous plan providers that can designate independent funeral directors but as the longest established of them all, we reference them.

Often, these plans underpay the independent funeral director.

To combat the falling sales of funeral plans, products called ‘funeral benefits options’ have come into place which Golden Charter sells to the independent funeral director for an ‘admin’ fee of £200 as long as the funeral director guarantees to apply a £300 discount when the funeral is required. This is, more than half the time, a family that would have come to that funeral director anyway, so the FD is paying a premium of £500 so that he can obtain the future business that he likely would have had anyway. The people benefiting are the financial company and the family. Independent funeral director’s are paying a premium to guarantee future business. If we don’t accept the plan, A.N. Other funeral director will accept it. Golden Charter encourages us to sell the plan and add an amount, before showing the £300 discount. Hardly transparent pricing, in anyone’s language.

PREPAID PLANS FAILINGS

1: Sales Network:
The sales network for many prepaid plans are part of the issue, estate agents, financial advisors, solicitors and banks, all sell plans. They have little or no knowledge of the local costings, disbursements or the product(funeral) they are selling. They receive £50 or more commission for selling a plan, from the financial company, not the funeral director. The sales network often undersells, leaving the shortfall to be explained by the funeral director when the funeral is required, years later.
The Solution: Legislation that only the end provider of the funeral service can sell a plan for their services. This way there would be no miss-sold plans or incorrect costings and the family would deal with the person that would ultimately look after them. The person selling the plan would be a funeral director and have extensive knowledge of funerals and costings. You wouldn’t go to a TV store to buy a car, why go to anything but a funeral director to buy a funeral?

2:Growth
The plan growth cannot guarantee to meet the future cost of a funeral. This is because the funeral director does not control the cost of Dr fees or church/minister fees or crematoria/cemetery fees. Sefton Crematoria near Liverpool raised their prices 40% in 2011. This massively impacts on plans sold before 2011, they cant possibly have grown at the same rate. Once again the funeral director is left to explain the issue, the shortfall, and ask for the difference when the funeral is required.
The Solution: Funeral plans should be a purely financial package called funeral or death insurance and would be a contribution towards the funeral. Nobody can guarantee future prices. Possibly make it a completely separate product to the funeral director. You wouldn’t go to a car showroom and pay for a car you would need in ten years and expect to pay no more, ten years later.

3: Prices of funerals/crematoria
To prevent the above solutions being negated by funeral directors charging what they want, align them all with standardised pricing structures. This would mean more competitive pricing, transparent pricing and easy like for like price comparisons. This in turn would reduce massive price increases and in turn mean prepaid plans would be more likely to meet their cost instead of shortfalling. Introduce standardised national crematoria and cemetery charges to create the same situation and then there is more control over charges and costs and much less risk of the funeral insurance falling massively short. There is no real reason these things should increase at more than inflation.

Why Will They See The End of The Independent Funeral Director?
Large corporations own many hundreds of small funeral directors and run them as a large corporate machine. The UK’s two biggest are Co-Op and Dignity. They have their own in-house funeral plans and massive financial ‘clout’ to sell and saturate local areas with leaflets and coffee mornings promoting their prepaid plans. These plans indicate the client can choose their funeral director when in reality they cannot. They can choose a Co-Op or Dignity owned funeral director only. The long term conclusion of this is that ultimately a larger part of the funeral market will be services provided by the large corporates and in time will make it much less viable for an independent funeral director to make a living.

Often, plans sold by insurances such as Sun Axxa or Help The Aged are plans that are promotional plans run by the large corporates. The result being that clients are tied to a funeral director they didn’t ultimately want.
The Solution: Again, the best solution for this is to make it legislation for only the end service provider to sell the plan or in fact make funeral plans and funeral insurances completely separate to the funeral director. This will prevent the sales network being deceptive and concealing who the plans is really being sold by and who the funeral director can be. This will also ensure correct knowledge by the person selling the plan.

Regulation and the CMA

The CMA have been collating a report about the funeral industry and how pricing may or may not be regulated. Here is my take on it as a Funeral Director with 25 years experience as the 7th generation of a long established family firm.

Our ethos is not to sell or up-sell and our priority is to make the funeral and the day what the family would like it to be.

A funeral director’s ethos should be to arrange an event that runs smoothly and exactly how the family perceived it, as close as possible to the budget they ideally would like. We are not here to talk a family into something they don’t want, for our gain.

Possibly it needs to be a more price driven and pricing transparent industry. This way, if everybody has similar prices, then service quality will be the key difference. This is where small family companies will be the better choice over corporate owned funeral directors.

THE CMA
The only way to have a standardised pricing comparison is to stipulate regulation of the industry.
1: Make it compulsory to be a member of a trade association. This will solidify the industry and guarantee a minimum quality level.
2: Structure a simple funeral and make it nationally standardised. This will give consumers a standardised like for like price comparison. Everybody must provide this on their literature.

PREPAID FUNERALS
These are a whole other mine field and have so many complexities it is almost impossible to discuss them all without confusing people. The main issue I believe, is the sales networks that exists, supported by the large corporates. These sell under the guise of insurance companies, via solicitors and estate agents and other outlets. The issue with this is that these sales people don’t know local costings and pricings or service levels of funeral directors. The above standardised simple funeral would help with this, however, I believe the solution to this is to only be able to purchase a prepaid plan from the Funeral Director who will provide the funeral when its required. This takes away miss-pricing, under quoting and promises that cant be delivered by sales people that have little product knowledge of funerals. If you would like your funeral with Dean Brothers then purchase your funeral plan from them. A simple solution.

Medical Reform UK

Medical reform refers to reform of the process in which the deceased’s normal GP would sign cremation paperwork relating illnesses and addresses etc which is then verified by a second practicing GP before the Funeral Director can proceed with any preparations for visiting. To obtain a GP and then a second GP to verify (and they must discuss the patient with one another) the paperwork sometimes can take 3-5 working days. This often delays procedure.

In 2011, a reform of this procedure was proposed and pilot schemes were put in place. As an industry we have heard little else from this, other than in 2014 and 2016 we were told it was coming soon. Now, in 2020, we are still waiting and families are still being distressed at the waiting period, often now hitting 4-6 working days, before both Drs can attend and sign paperwork. The proposed scheme was a team of retired GPs covering a region and discussing the patient with their most recently visited GP (less time consuming for the GP) then attending as the second Dr at the Funeral home. This was proposed to happen within 48 hours which would massively expedite procedure.

Our biggest question is ‘where is this up to and when will this happen?’