Pre-paid funeral plan providers – an introduction to the Financial Ombudsman Service

Date published: 28 June 2022 Blog

Clare Mortimer

Managing Ombudsman

Pre-paid funeral plans will become regulated by the Financial Conduct Authority (FCA) from 29 July 2022. In this blog, Managing Ombudsman, Clare Mortimer, outlines the support we offer to financial businesses to help plan providers that are new to regulation and to the Financial Ombudsman.

What changes on 29 July 2022?

From 29 July 2022, any financial business that sells and provides funeral plans must be regulated by the Financial Conduct Authority (FCA). Regulation will require plan providers to follow rules set out by the FCA in relation to the way plans are sold, the way customers are treated and how to handle complaints should they arise. Customers of funeral plan providers will have access to the Financial Ombudsman Service – which means they will be able to bring a complaint to us if they are not able to resolve it directly with their provider.

Some plan providers will already be familiar with regulation by the FCA, and with the work of the Financial Ombudsman, because they are already covered for other activities, or for other products and services they provide. However, we know some funeral plan providers will be new to FCA regulation, and to the work of the Financial Ombudsman Service, so we are setting out here some useful information about the support we offer and how we engage with financial businesses, to help funeral plan providers get to know us as part of their preparation for regulation.   

What do I need to do if I receive a complaint?

When you are regulated and if you receive a complaint from a customer, you will be expected to deal with it fairly and promptly, and within eight weeks. On our website, we set out some of our guidance for handling complaints, and things that we think are helpful for businesses to know or refer to when responding to a customer complaint.

The detail and rules for how businesses should handle complaints are set out in the “Dispute resolution: complaints” section of the FCA handbook. You can find other information about becoming a regulated funeral plan provider in the FCA’s regulation hub.

We have a dedicated helpline, our Business Support Hub, so that businesses can speak to us informally about a complaint they have received. The Business Support Hub talks to financial businesses (and others involved in resolving complaints for customers) about complaints that have not yet come to the Financial Ombudsman Service, and they might be able to help you resolve the problem at an early stage. The Business Support Hub gives general information on how the Financial Ombudsman might look at a particular complaint and can offer guidance on our rules and how we work. 

Referring customers to the Financial Ombudsman

When you receive a complaint, you should work with your customer to get to the bottom of what happened, investigate fairly whether anything went wrong, and – where appropriate – take steps to put things right.

Some of the complaints you receive will involve vulnerable customers, particularly those where the customer has been recently bereaved. The FCA has published guidance on the fair treatment of vulnerable customers, which may help you think through how best to engage with, help and support these customers. 

Take a look at our online guidance for financial businesses to find out more about some of the things you will need to think about when handling complaints:

What is the Financial Ombudsman’s complaint-handling process?

We will be able to accept complaints from plan holders – the person entering into the contract. Or, where the plan holder has died, their personal representative – this will usually be the executor of their will. If there is no will, this will be the plan holder’s next-of-kin.

If we receive a complaint about your business we will check that you have already looked at it and that you have given the customer your final response, or the time you have to do so has passed. We will check it is something we can deal with and if we can then we will investigate the complaint.  We will ask both sides for information and evidence about what has happened.

One of our case handlers will look at what has happened and will get in touch with you to ask you for any further information they need – they will then let you know their findings. If we decide you have treated the customer unfairly, or have made a mistake, we will ask you to put things right. Our general approach is that the customer should be put back in the position they would have been in if the problem had not happened – this might mean paying compensation or changing something specific in relation to their plan. In some cases, we may award compensation for distress or the inconvenience your customer experienced. You can read more about this in our guide to understanding compensation

How does the Financial Ombudsman support and engage with financial businesses?

As well as resolving complaints we engage with financial businesses, trade bodies and business representatives to raise awareness of our work and of trends we see, to help financial businesses resolve complaints early on and, where possible, to help prevent complaints arising.

Where can I find out more?

We have published some initial information for pre-paid funeral plan providers, and we will be updating this with more detail about our approach to complaints once regulation begins. It will set out the types of complaint we will be able to help with, our approach to the complaints we see, and how we put things right.