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It is authorising 26 providers. These firms hold around 1.6 million plans between them, making up 87 percent of the market. Rules that took effect yesterday include a ban on cold calling and commission payments to intermediaries, plus a requirement for a company to deliver a funeral unless the customer dies within two years of taking out the plan.
Customers of authorised providers will now have access to the Financial Services Compensation Scheme, so their money is protected if their provider fails.
They can also make a complaint to the Financial Ombudsman Service, even if it involves something that happened before July 2022, if the firm was registered with the Funeral Planning Authority at the time when the issue occurred.
The FCA said firms that applied for authorisation but were not given it have until October 31 to transfer their plans to approved firms or refund their customers.
Emily Shepperd, executive director of authorisations at the regulator, said: “We are pleased that 87 percent of the market is now under regulation.”
“With our new rules in place, consumers will be better protected when they need it the most.”
“It is unfortunate that a number of firms chose to exit the market, leaving customers who had sought peace of mind for their loved ones understandably worried.”
“It is a good outcome for consumers that some providers have stepped in to provide funerals for the customers of these providers at short notice.”
The FCA plans to introduce a consumer duty from July 2023 to put customers first. It will apply to funeral plan providers and will mean their clients should receive communications they can understand, products and services that meet their needs and offer fair value.
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