‘Prepare for losses’ warning for funeral plans victims as wait to hear drags on

Thousands of victims who bought pre-paid funeral plans from companies that then folded after rules were tightened last year are still waiting to hear about the fate of their money.

But recent inquiries Crusader has received indicate that confusion remains among some customers, leading to misguidedly high expectations about what they will get back. 

Regulation of pre-paid plans was introduced by the Financial Conduct Authority (FCA) last summer, a crackdown that gives consumers better value and greater protection.

Some 20 companies either collapsed or withdrew from the market as a consequence.

++ If you’ve been affected by this issue or feel you’ve been a victim of injustice, please contact consumer champion Maisha Frost on [email protected] ++;

John Wallace was among 19,000 customers of Pride Planning and took out an agreement that cost him £3,395. While the plans offered the chance to pay by installment, “I paid upfront in 2016,” explained John. 

“It was important for me to have peace of mind knowing my funeral expenses were taken care of and I would not be a burden on my family.”

After Pride went into administration, now FCA authorised provider Dignity Funerals stepped in with a transfer rescue for customers so they got a plan that “as far as possible matched their previous one”. 

John opted in so he still had cover amid the chaos. Some months later however he found out that his chosen funeral director in his home town had been changed to one 25 miles away.

This was too distant and impersonal for John, so he decided to cancel. 

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But having waited six months and hearing nothing more about his Pride payment, “I’m getting really fed up with the time it’s taking and when I will get my money back,” he told Crusader.

But, as well as venting justifiable frustration that is shared by others, what he said rang alarm bells. 

After checking, it was as we feared: John was under the impression that he would be fully refunded, something that is very far from certain. 

Before the FCA’s clean up consumers were sometimes subjected to pushy sales practices and manoeuvred into buying opaque plans that masked complicated financial structures and poorly managed investments.

Plan monies paid to Pride are held in an independent trust whose trustees are in charge of calculating what, if anything, is left for holders. That includes those who carried on opting in with Dignity and those that didn’t. 

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John “and other customers of Pride Planning will be entitled to any remaining funds we receive from their trust fund. However, through no fault of ours, this is likely to be significantly less than they paid in,” a Dignity spokesperson warned.

Information sent to customers also emphasised the position. So far Dignity has not received any money and no timescales have been forthcoming. This is something people deserve and Crusader supports their demand for officials to get a move on.

The door is still open too however for John should he have second thoughts about his opt out. 

Dignity confirmed: “Any customers that have transferred to Dignity and then cancelled can reactivate their plans. However, this would only apply to customers that chose to transfer and did so prior to the administrators’ cut-off date of February 7, 2023. We cannot accept any late requests.”

[John’s name has been changed]

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