NORTH Ayrshire & Arran MP Patricia Gibson wants to see a new law introduced to regulate the pre-paid funeral industry.
The SNP politician says this would mark an important step towards “ending the indignity of funeral poverty” and to ensure that consumers are protected.
There are thought to be a million active funeral plans in the UK and currently the industry is self-regulated by the Funeral Plan Authority (FPA).
While the majority of funeral plan providers offer a good service, some do not sign up to or adhere to FPA standards.
Pre-paid funeral plan providers are not regulated by the Financial Conduct Authority (FCA), meaning consumers have no access to the Financial Services Compensation Scheme should a provider fail to pay out and consumers are not covered by the Financial Ombudsman Service should they wish to raise a complaint and have it adjudicated independently.
Mrs Gibson said: “Funeral plans are a very effective way of planning for the future and ensuring that an otherwise costly and difficult time proceeds a little easier for relatives and friends.
“No one should have to face financial hardship or be unable to give a loved one a dignified, meaningful funeral because of the costs involved.
“While the majority of funeral plan providers operate with very high standards there is unfortunately little to be done should the worst happen and a provider goes bust or there are hidden fees.”
The recent Social Security consultation, which ended last month, included a section on the funeral payment, one of the benefits being transferred to Scotland with new social security powers.
The SNP Government say they will use these new powers to reach more people, reducing the need for borrowing and the difficulties they can cause.
Mrs Gibson added: "The SNP Government-commissioned a review of funeral poverty from John Birrell, Chair of the Scottish Working Group on Funeral Poverty and Scotland Citizen’s Advice Scotland which recommended that the UK Government and FCA reviewed the current self-regulation of pre-paid funeral plans to avoid potential miss-selling, cold calling, insecure deposits, while protecting customers funds."