Watchdog’s funeral probe blown off course by Covid-19 as death rate soars

The competition watchdog has been forced to abandon some of the remedies it was considering to fix a funeral sector that is “not working well” because the coronavirus pandemic has made them unsafe to implement.

The Competition and Markets Authority (CMA) said it would require funeral directors and crematoria to be more upfront with their pricing, but could not take some of the more radical measures that it had considered, such as price caps.

Martin Coleman, who chaired the CMA’s inquiry panel, said: “Given the inherently distressing circumstances in which people arrange a funeral, we want to make sure they can be confident that they are not being overcharged and that their loved one is cared for properly – this is what our investigation has focused on.”

Insurance company Royal London had been pushing for funeral help for low-income families, and for information on pricing to be available in hospitals and care homes.

“It’s disappointing that the CMA’s investigation hasn’t resulted in the change we had hoped but it is encouraging to see that funeral directors will have to be more upfront with the pricing and services they offer,” it said.

“While there has been change in the market since it was put under scrutiny by the CMA, there is more work to be done, particularly for low-income families who fall into funeral poverty.”

Lindesay Mace, who manages Quaker Social Action’s Down to Earth project, said she was delighted the CMA had recognised problems in the industry, but said it had not gone far enough.

“It is deeply disappointing that price controls are not being implemented at this time and we will seek to hold the CMA to their promise of revisiting this in the future,” she said.

James Daley, of Fairer Finance, supported the CMA’s decision.

“I think price controls need to be a last resort, and the first thing you need to do is enable competition to work, and it doesn’t work in this sector,” he told the PA news agency.

He said it is more important to allow consumers to easily compare and understand what they are getting – as well as introducing a minimum standard that a funeral director needs to keep to.

“It is possible to set up a funeral director and keep the bodies in a shed in the back garden with no refrigeration and your customers wouldn’t be any the wiser,” he said, while stressing that most of the sector behaves responsibly.

The CMA said that while most funeral directors give a good service, “some are providing unacceptably low levels of care of the deceased”.

The probe’s outcome was positive news for the owners of funeral provider Dignity, where shares jumped more than 60% on the news at one point.

The value of stock in the company had been in the doldrums for months over worries that the CMA might take extensive action against pricing in the sector – a move thwarted by the coronavirus crisis.

The CMA said it struggled to get the right data from funeral directors and crematoria – who are overstretched during the pandemic, and could therefore not forecast the impact of price controls on their business.

It said the pandemic has created “insurmountable obstacles”, but plans to consider if it needs to carry out another investigation when conditions are more stable.

The industry has been waiting for 17 months to hear the CMA’s findings.

It has, they say, led to runaway prices in the sector, and sometimes unnecessary cross-selling of other products.

“The fees charged by funeral directors and crematoria increased at a rate well above inflation for at least a decade,” the CMA said.

There is also little hope of escaping the runaway costs, as attempts to shop around online are often thwarted because many funeral directors do not list their prices on their website.

The CMA also recognised that the market has been changing in recent years, as people opt for more scaled-back ways of saying goodbye to their loved ones.

This has been accelerated by the Covid-19 crisis, which has made elaborate funeral services impossible for health reasons.

It is unclear how this might continue after the pandemic ends.

Clive Whiley, executive chairman of Dignity, said: “We will take the time to fully assess the CMA’s provisional decision report and its recommendations, and will continue to constructively engage directly with the CMA through the statutory process.”

Sam Tyrer, managing director of Co-op Funeralcare, said: “The Co-op has taken a range of steps to significantly reduce funeral price and as the CMA notes, the market has adapted at pace to respond to the devastating loss caused by coronavirus.”