A review by the Competition and Markets Authority (CMA) of the funerals market has indicated that the introduction of transparency rules, part of its Funerals Market Investigation Order 2021 (the Order) are having a constraining effect on funeral prices after many years of real-term rises, meaning that costs paid by UK consumers for funeral services are likely to be lower as a result of the CMA’s intervention.
The review found that funeral directors operating more than 4 branches charged their customers on average just over £2,600 for funeral services in the year ending 31 August 2022. This level is broadly unchanged since the previous year, representing a reduction in real terms, at a time when many other prices are increasing.
The report comes as all funeral directors across the UK have been ordered to comply with rules which ensure bereaved families have the information they need to plan and buy a suitable funeral.
The CMA is commencing enforcement to tackle non-compliance by some funeral directors – and is writing to trade associations seeking their cooperation to support compliance by their members. The first wave of private enforcement letters will be sent to a number of funeral directors found to have breached the Order in the coming days with further action to follow.
An assessment by the CMA indicated that over 100 funeral directors appeared not to be complying with the transparency rules – representing around 5% of providers.
To help ensure compliance with the Order, the CMA has also published further guidance for funeral directors and crematorium operators on requirements to make bereaved families better aware about the total cost of the services they may need, as well as allow them to compare the services of different providers.
The guidance includes information on how funeral directors must set out their prices on a Standardised Price List and how funeral directors are banned from entering into deals with hospitals, hospices and care homes, or using their contacts with coroner offices and police forces, to tout for business or gain an unfair advantage.
Adam Land, Senior Director of Remedies at the CMA, said:
Losing a loved one is one of the most difficult experiences anyone can go through – so it is particularly important that funeral providers give their customers all the information they need. A small number of providers are not doing this.
The CMA put these rules in place to ensure bereaved families can trust the funeral service they buy is the one that best meets their needs. Our new guidance will support providers in delivering for bereaved people.
We are now ramping up enforcement action to ensure that the minority of funeral providers who are breaking the rules by not being open with bereaved families will face the consequences.
The initial wave of enforcement action follows around 15 months of advice and support to funeral directors and crematorium operators by the CMA to help them understand and comply with the transparency rules introduced by the Funerals Market Investigation Order 2021.
Initial enforcement letters will be sent privately to funeral directors. Where breaches continue, the CMA will consider publishing the names of the businesses involve d, details of these breaches, and the enforcement action being taken. The CMA has powers to issue legally binding directions to compel non-compliant firms to come into line.
The CMA has published its guidance for funeral directors and crematorium operators today (Thursday 27 January 2023), as well as a version for smaller funeral directors who operate with fewer than 5 branches.