The competition regulator has launched an in-depth investigation of funeral directors after accusations that grieving families are being ripped off.
The Competition and Markets Authority (CMA) said some large companies were taking advantage of the “vulnerability of many people” by charging higher prices. Big firms in the sector have hiked prices between 6 and 8 per cent a year for the past eight years, they said.
Some local authorities have also sharply increased the fees for burial and cremations, according to the CMA.
Funerals typically cost several thousand pounds and many people are not in a position to look at a range of choices, leaving them open to being overcharged.
A new probe will focus on whether there is enough competition between funeral directors and suppliers of crematoria services.
Firms are also reluctant to publish clear prices or to provide comprehensive information on quality and range, making it difficult for people to compare funeral directors.
The CMA said low numbers of crematoria providers in some areas, coupled with the difficulty faced by new companies entering the market, is leading to less competition.
Dignity, one of the biggest funeral providers, said it welcomes the probe.
Boss Mike McCollum said: “Dignity has made clear that we welcome the CMA’s investigation into the funeral market and look forward to continuing our work with the CMA and other industry bodies to protect consumers.”
Russ Mould, investment director at AJ Bell, said Dignity had spent “many years making large profits from charging high prices for funeral”.
He added: “Dignity has already introduced cheaper funeral prices and we’ve seen the rise of a few price comparison sites but the industry isn’t evenly weighted. Dignity and the Co-operative dominate the market despite there being an estimate 3,000 independent funeral providers also vying for business.”
Terry Tennens, chief executive of the National Society of Allied and Independent Funeral Directors, said the CMA’s decision was “no surprise” to the industry.
Mr Tennens said: “Many family-run funeral firms across the UK will welcome this decision but with the caveat that the panel’s investigation is thorough and gathers information and evidence from a wide range of stakeholders, in order to ensure any follow-up remedies are proportionate and do not result in small firms facing an unrealistic regulatory burden.
“We agree with the CMA’s concerns but it’s important that a distinction is made between the behaviour of family-run firms and large chains and crematoria operators. The latter two have significantly hiked prices in recent years in comparison to independent funeral director businesses. We hope the investigation panel will remain aware of this throughout its inquiry.”
