I never thought I would ever say this, but I have openly wept in recent weeks after speaking to numerous elderly people who have all been taken for a financial ride by companies operating outside the sphere of the almighty Financial Conduct Authority.
Salt of the earth people. Trusting individuals, often struggling to make ends meet. Financially fleeced by businesses that have abused the fact that most elderly people want to do the right thing for their children, and ensure everything is hunky dory financially when that moment comes when they are no more.
Help me dear readers: how does a civilised society allow such financial rogues to make hay – and get away with it for so long?
I know the FCA is imperfect, expensive, bureaucratic, a world leader in procrastination and prone to staff going on strike, but it is better than the Wild West that exists beyond its regulatory reach.
Nowhere have the rogues roamed with more gay abandon than in the pre-paid funeral plans market. A funeral plan is a damn easy product to sell – a plan that will ensure the funeral of your choice is delivered when you shuffle off this mortal coil.
And at a price today, rather than in 10 or 15 years’ time, when funerals will cost a lot more than they do today (inflation, like elsewhere in the economy, is raging in the funerals market). It is a comfort purchase that many people in their late 60s and 70s make.
Although some good names operate in this space – the likes of Dignity and the trusty Co-op – there are also a whole bunch of charlatans out there whose only intention is to feather their own nests. They are worse than double-glazing salesmen.
Thankfully, the whale-like FCA – encouraged by some sterling work from the Competition and Markets Authority and the likes of consumer champion James Daley – have got wise to all this. The result is that come the end of July, funeral plans will fall within the FCA’s orbit. About time too.
Yet, as the FCA runs the rule over those providers that want to make the jump to a regulated world, it is uncovering some horror stories. None worse (for the moment anyway) than Safe Hands Plans, which has gone into administration, leaving some 47,000 customers wondering whether the plan they bought is actually a dud.
I have done some financial digging into this outfit in recent weeks – and what I have uncovered has made my hair curl. Money regularly taken from the trust fund where customers’ money was held – and ending up in the directors’ pockets. A skimming off of the cream so deep that the trust fund no longer has sufficient money to pay for all the funerals promised.
That is only part of the scandal, as we will see in the coming weeks and months as the administrators dig deeper into what happened at Safe Hands. It ain’t going to make for pleasant reading, that’s for sure. And I am certain that Safe Hands will not be the only provider that will not make it past the end of July. Other providers will fail to get to the FCA’s version of ‘go’ on its Monopoly board. Capital Life has just withdrawn its submission to be authorised – although there is nothing to stop it reapplying.