People searching for prepaid funeral plans online are being warned to avoid fake comparison websites that dupe customers into supplying names and telephone numbers.
Most people looking to pay for their burial or cremation in advance do so to save their families the hassle, expense and heartache in future. But a lack of regulation over these plans and how they are sold has allowed for an eruption of websites claiming to be able to compare quotes.
In reality, many are predatory number-catching websites known as ‘lead generators’. Telephone numbers entered into the website can then be passed on to companies that deliver a hard-sell.
‘Hounded’: Heather Bridger used a prepaid funeral website to compare prices
The warning comes after The Mail on Sunday last week exposed aggressive and illegal sales tactics used by a call-centre selling funeral plans on behalf of provider Avalon. Staff were caught on camera boasting about bombarding people with nuisance calls despite pleas to be left alone.
Fake comparison websites can look authentic with big lettering inviting consumers to click on buttons saying ‘compare now’ or ‘compare quotes’.
They fool people into believing they will see a panel of quotes after entering a few personal details. But instead they are directed to a page telling them to expect a phone call. Ensuing calls may come from a genuine broker, but more likely from a sales agent tied to one provider. The consumer has no way of knowing exactly who will call them once they hand over their details.
James Daley, founder of consumer champion FairerFinance, is calling for regulation of funeral plans by the Financial Conduct Authority – which would impact how business is conducted online.
He says: ‘These websites, which pose as independent, verge on being criminal. In a regulated market they would be shut down.’
Daley adds that people searching for a plan ‘need to be extremely careful’.
Sally Hill spotted a gap for a genuine comparison service when her research demonstrated how unscrupulous the online market was. She is now director and founder of FuneralPlanMarket, a website that shows whole-of-market funeral plan comparisons without customers needing to share personal details.
Scandal: The probe found a call centre was using aggressive tactics to sell pre-paid plans for funerals
Hill says: ‘Lead generation websites dressed as comparison websites inconvenience customers twice over because the comparison tables they expect to see do not exist and they are then bombarded with unwanted sales calls.’
A HARD SELL DURING HARD TIMES
Heather Bridger says she was ‘hounded’ by sales calls after using a prepaid funeral website to compare prices. The 52-year-old department sales manager from Perth, Scotland, started searching for a deal after witnessing first-hand the emotional upheaval of planning a funeral. Earlier this year her best friend’s husband died suddenly from a heart attack at the age of 56, despite being a healthy sportsman.
Heather says: ‘The stress was horrific. He was self-employed for 14 years and had no life insurance, no funeral plans and no savings.
‘It was then I realised just how much I wanted to have my own funeral organised so my family would never have to go through that ordeal.’
HOW TO BUY A PLAN WITHOUT THE PITFALLS
- Spot the hallmarks of a fake comparison website. If you cannot compare plans without supplying a telephone number, alarm bells should ring. Do nothing without reading the website’s terms and conditions. You should also check whether the firm is registered with Companies House, the official registrar of UK businesses. Visit beta.companieshouse.gov.uk.
- Compare deals on the FuneralPlanMarket website, using the ‘comparison tables’ section if you want to get an idea of cost and level of cover. The company also offers free advice over the phone (0371 811 0161).
- Check exactly what costs are covered in a plan you select. Few guarantee to cover third-party costs – such as cremation and doctors’ fees. Many offer an ‘allowance’ to cover such fees, but amounts paid out will vary between providers.
- Note other exclusions. For example, if you move house to an area where funeral directors’ costs are higher, your family may be asked to pay a top-up after you die. Some deals will protect customers against this.
- Read more about funeral plans on the Money Advice Service website at moneyadviceservice.org.uk/en/articles/funeral-plans.
- Buy from local independent funeral directors or established companies. James Daley, of consumer group FairerFinance says: ‘Reputable providers include Co-op, Dignity, Golden Charter and Perfect Choice.’ l PAY for part or all of the plan with a credit card. This gives you added protection under Section 75 of the Consumer Credit Act, meaning you can get your money back from your credit card provider if a company goes bust.
But her search came to a halt after simple enquiries turned into nuisance sales calls. She says: ‘Every time I used a comparison website I was hounded by phone calls from different companies who really just wanted me to sign up. But I did not feel confident about it.’
After a second friend passed away recently, Heather returned to her search and this time used FuneralPlanMarket. She has now found a plan with which she is comfortable.
Costly: Average funerals in the UK cost more than £4,000 according to insurer SunLife
LACK OF REGULATION
Average funerals in the UK cost more than £4,000 according to insurer SunLife. Costs are likely to keep rising. Funeral plans offer buyers the chance to pay for tomorrow’s costs at today’s prices.
But large sums of money to cover future expenses are given to providers of prepaid plans well in advance of their use.
THREE OTHER WAYS TO MEET THE COSTS
Known as over-50s plans, you pay a low monthly sum and receive a payout to cover costs such as funeral plans after you die.
But these deals can be poor value if customers end up paying in more than they ever get out of it. If a customer stops paying, the plan is no longer in force and money already paid has been wasted.
SAVINGS AND INVESTMENTS
Rather than gamble with a poor plan riddled with exclusions, it makes sense to put aside money each month into ordinary savings and investments.
The money can be used to cover funeral costs if needed by your family in future. Yet there are no guarantees of you saving enough or refraining from using the funds for something else.
Furthermore, relatives would still need to pay upfront funeral costs and would only be repaid if they are benefactors when your estate is divided up.
WHOLE OF LIFE INSURANCE
This type of life insurance pays out a lump sum to relatives after you die. Other life insurance policies last only for a set term, such as the life of a mortgage or until children are grown up and independent.
A whole of life policy pays out whenever you die – but may require you to pay monthly sums for the rest of your life. Some policies allow you to cease paying when you reach a certain age. These policies can also be linked to investments.
Despite this fact, the products are not regulated. The Funeral Planning Authority oversees the industry with its own Code of Practice and rules for members to follow. Most large providers are signed up – including Dignity and The Co-operative Funeralcare – but membership is voluntary.
Daley says: ‘The main problem with this market is there is no proper regulation. It is clear from The Mail on Sunday’s story about Avalon that the voluntary regulator is struggling to keep on top of poor practice among members.
‘We would also like to see the Information Commissioner’s Office doing more to tackle illegal practice around data handling that is prevalent among some third-party lead generating firms.’
Courtesy: Daily Mail Online