The costs of funerals have increased dramatically over the past ten years, at three-times the rate of UK’s inflation.
Rising funeral costs have forced thousands of grieving families into debt.
During a time of grieving, customers are at their most vulnerable and could be taken advantage of by unscrupulous funeral directors.
The Competition and Markets Authority (CMA) carried out a study to assess whether funeral director sales practices adversely impact customers’ ability to make fully informed decisions.
In particular, they looked at whether sales practices could limit customers’ ability to understand the available options and to make comparisons, with the potential result that they make suboptimal purchasing decisions.
The CMA focused on the information that funeral directors provide throughout the customer journey: from their websites to the first contact with potential customers, through to making a sale.
It was found that most consumers do not research funeral directors beforehand.
At the point of need, most will choose a local funeral director based on recommendation or previous experience.
They will typically undertake no, or only superficial research, before contacting the funeral director.
From the CMA’s review of a random sample of websites, they found that around half contained no price information. Where information was available, it was often incomplete or unclear.
As a result, many may struggle to get a decent idea of funeral costs from the price information available on funeral directors’ websites.
During the CMA’s mystery shopping exercise, a number of funeral directors were called. Some funeral directors did not provide information, and others provided information that appeared incomplete or potentially confusing.
When consumers notify the funeral director of a death, the following information is provided: practical advice, to collect the deceased, and to set up a face-to-face arrangement meeting.
During this call, information on funeral prices, costs and options are generally neither requested by the customer nor offered by the funeral director.
Most consumers do not seek information on prices or options before the arranged meeting.
Additionally, funeral director practices on offering to send information vary widely.
From the available evidence, it is clear that most customers find out about the funeral director’s prices and options only in the arrangement meeting itself.
The large majority of consumers did not complain about either the funeral director or the funeral purchased.
Nevertheless, a small minority indicated some dissatisfaction with the sales process.
Some funeral directors did not discuss prices at all, or at the time when decisions were being made that had an impact on the total bill.
In such cases, customers may not have a clear idea of the cost implications until late in, or at the end of, the arrangement meeting (and potentially not before the customer has committed to using the funeral director).
The wide variation in embalming prices across funeral directors indicates that they have a significant influence over customer decisions on whether to purchase particular products or services.
Some funeral directors request upfront payments and may charge the customer if they wanted to switch to a different funeral director.
Once a funeral directed has been instructed, most customers will not consider switching to a more affordable option.
Nevertheless, if they did, these factors could make it more difficult, or reduce the incentive, to switch.
Also, requesting upfront payments for low-cost funerals could deter customers from purchasing such options.
Louise Eaton-Terry, funeral cost expert at Royal London, said:
Rising funeral costs have forced thousands of grieving families into debt so we welcome the CMA shining a spotlight on the issue. The evidence shows that very few people compare prices or get quotes from more than one funeral director when arranging a funeral.
With three quarters of deaths happening in medical or care institutions, we want impartial information on financial support and guidance to be available at hospitals, hospices and care homes.
The costs involved in arranging a funeral are also opaque, so we are calling on the industry to make their pricing clear and transparent to ensure those arranging a funeral fully understand the options available.
The information contained in this blog post does not constitute advice or recommendations. You should seek independent financial advice before acting on any information on this website.