Unregulated companies are selling a new Pre-Paid Probate Plan product. Some of the companies have individuals associated with funeral plan firms that the FCA refused authorisation in 2022.
FuneralExperts.com takes a closer look at this new product and urges consumers and the funeral industry to be wary and heed the lessons that should have been learnt from Funeral Plan regulation.
The FCA Publishes Consumer Warning on Pre-paid Probate Plans
On the 25th of January 2023, the Financial Conduct Authority (FCA) issued a consumer warning about Pre-paid probate plans.
“Pre-paid probate plans are unregulated in the UK. We strongly advise that you consider carefully whether these products meet your needs and offer value before buying, as there are no regulatory protections in place for you.”
The FCA’s consumer warning comes hot on the heels of the FCA 2022 intervention into the Pre-paid Funeral Plan market following years of mis-selling, mismanagement of deposits and, in a few cases, outright fraud.
A Stark Lesson from History
In the lead-up to the FCA intervention into the Funeral Plan market, there were several cases of mismanagement and outright theft by unscrupulous and incompetent actors within this marketplace. In a couple of instances, there is a widely held suspicion that fraud has been disguised as incompetence.
The simple fact is that nothing can be done about the tragic cases where a consumer has lost all the money put into these plans. Why? Because the FCA did not regulate this market, neither quality assurance nor checks and balances to a regulated marketplace were available.
In short, THERE WAS NO CONSUMER PROTECTION in place for this unregulated market.
The result? Several firms wound up or collapsed, leaving tens of thousands of plan holders out of pocket to the conservative tune of £60m+.
Pre-paid Probate Plans Seem Sensible. What Is the Problem?
The FCA has said,
“When designed and marketed appropriately, pre-paid probate plans could help people organise administration arrangements ahead of their death. But as we do not regulate pre-paid probate firms or the pre-payment of probate costs, there are no regulatory protections in place for you.”
The FCA has highlighted several areas of concern:
- The Financial Services Compensation Scheme does not protect pre-paid probate plans. This means that there is no guarantee that you will receive your money back if the company fails.
- Commission is often included in the fee you pay. This increases the price of the plan. There is no commission ban on the sale of pre-paid probate plans (as there is for funeral plans).
- Your money may not be safe if the firm should fail, as there are no rules requiring the money paid into plans to be held in trust or backed by insurance.
- The Financial Ombudsman Service cannot help resolve any complaints, but if you think a business has broken the law or acted unfairly, you can report them to Trading Standards.
More worrying for the consumer is that the FCA had said that they had seen increased marketing activity of pre-paid probate plans in recent months,“…including from firms and individuals associated with funeral plan firms that we did not authorise and whose customers lost money when they collapsed.”
The FCA says,
“If you are thinking of buying one of these products, you should consider carefully if the product meets your requirements and that the provider is reputable, has robust measures in place to ensure your money is safe and is able to deliver the promised service in the future.”
At FuneralExperts.com, we urge all who are considering buying this product to do their research carefully and, if you have any doubts, speak with a regulated investment or legal advisor.
For more information on getting professional help with probate and estate management, go to
FuneralExperts.com is an independent funeral director comparison website that brings ease of use, transparency, and education to the bereaved during extreme emotional vulnerability.
Arising as a direct result of the Competition and Market Authority’s funeral market investigation, our service aims to fill the typical void in the knowledge of what is involved in organising a funeral, through extensive collaboration across government, government agencies, charities, funeral directors, and a host of other related funeral industry participants.