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Silence ensures that history repeats itself – Erin Gruwell

Recent Regulation

We recently wrote about the welcome regulation of funeral plan providers by the Financial Conduct Authority (FCA). It has become painfully clear how crucial regulation is after the company Safe Hands went into administration earlier this year. Their customers’ funeral plans have been voided, and it is likely that no more than 20% of their money will be refunded.

The FCA has warned the public not to buy funeral plans from companies that, despite withdrawing applications for FCA authorisation, are still advertising funeral plans on their websites, such as Empathy UK Funeral Plans. You can check the FCA website here for information on specific firms.

From 29th July 2022, companies without authorisation cannot legally sell pre-paid funeral plans unless they meet the regulations.

One such regulation includes looking after and using customers’ money responsibly. Sounds simple. A basic expectation, surely? But unfortunately, there are companies out there with no scruples once you’ve handed your money over.

The FCA’s new regulations will hopefully flush out such companies from the list of pre-paid funeral plan providers. However, pre-paid probate is a service that remains unregulated (find out about probate here).

Pre-paid Probate: Same Model, Same Problems

Imagine you run a company. Doesn’t the following sound like the perfect business model? The business receives upfront payment for something that it might not deliver for years, and the customer won’t be around to measure the quality of that service against their expectations. Plus, target customers include the elderly, who are more likely to be influenced by high-pressure sales tactics and a narrative around easing the burden of future bills for loved ones.

This model could describe pre-paid funeral plans or pre-paid probate. The only difference is that the latter is not properly regulated, and there are no immediate plans for it to be.

Therefore, pre-paid probate is an ideal shift for funeral plan providers who are not in a position to register with the FCA.

However, it is the same model with the same problems for customers and the industry as a whole. And a report from the Legal Services Board agrees. The report, written by ITC (the largest probate company in the UK), covers miss-selling and fraud, saying: ‘Pre-paid probate is, in our opinion, the largest dormant but inevitable disaster that will hit this whole sector.’

Why Wait for History to Repeat Itself?

Why wait several years for the same problems that have faced the funeral planning sector to build and happen again? Why let more customers suffer the same stress and financial loss when a pre-paid probate provider inevitably goes under?

The Best Foundation believes that change needs to happen now.

Regulation of pre-paid probate is essential for protecting customers’ money. If a provider fails, customers will have access to the Financial Services Compensation Scheme (FSCS). Financial losses – like those Safe Hands’ customers have faced – could be avoided.

Our Code of Conduct, applicable to all Best Foundation members, prohibits the selling of pre-paid probate products.

Best prioritises customer protection, so we offer a client guarantee, ensuring no customer of a Best member ever loses their money when it comes to estate planning. But we want safety for all. That is why we will fight and campaign for better regulation of the estate planning industry.

Why Regulate Pre-Paid Probate?

  • To ensure that companies offering probate services are responsible for customers’ money
  • To prevent miss-selling of probate (some estates do not require it)
  • To make extra charges clear to customers from the outset
  • To provide a financial safety net so that if a company fails, customers can apply to FSCS
  • To prevent cold calling as a high-pressure sales tactic

Our Next Steps

We will continue to raise awareness of the issues caused by pre-paid probate plans and campaign for regulation in this area.

We hope we can rely on your support and will announce soon how you can help.  

Follow us to keep up to speed with our campaigns, and join us to take your seat at the table.

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