Watchdog warns pensioners not to put money into two other funeral plan firms after Safe Hands collapse hit thousands
- FCA promise to regulate funeral plan market has seen firms in trouble
- Safe Hands collapsed in March, leaving 47,000 customers facing huge losses
- Company bosses were accused of skimming from the fund to pay the funerals
- Watchdog strongly advises people to avoid funeral firms Unique and Empathy
The UK’s financial regulator has issued a warning not to buy pre-paid funeral plans from two companies after the collapse of Safe Hands in March hit thousands of pensioners.
The Financial Conduct Authority named Empathy (Empathy Funeral Plans UK Limited) and Unique (Fox Milton & Co Limited, trading as Unique Funeral Plans) as the two companies that they ‘strongly advise’ those planning their funerals to avoid.
Pre-pay funeral plan provider Safe Hands went into administration in March, leaving 47,000 customers – many of them elderly or vulnerable – facing financial losses running into thousands of pounds.
‘People should avoid buying new plans from funeral plan providers that have not applied for authorisation or had their application withdrawn or refused,’ the FCA said in a statement on their website, going on to name Empathy and Unique.
‘We strongly advise that you do not buy a plan from these firms.’
Safe Hands, run by millionaire boss Richard Wells, 35, folded after a crackdown on the industry that promised to stop funeral plan providers that do not meet FCA requirements from selling or carrying out funerals.
Wells, whose personal passion is racing cars, had only bought the business in February 2020.
Failed funeral boss Richard Wells (left), 35, was driving Silverstone in a supercar less than two weeks before his firm went bust, leaving nearly 50,000 pensioners facing losses
Richard Wells (pictured driving) was racing at the Praga Cup, a six-stage supercar competition, in which rich enthusiasts team up with professional drivers
Pre-pay funerals are supposed to provide peace of mind by allowing customers to pay off the costs of their funeral or cremation in instalments.
Safe Hands customers paid £3,000 on average for their funeral plan, and have now been told by administrators that they can expect no more than £300 to £600 back.
Kim Sharp, from Orpington in South-East London, bought a plan in instalments, reaching a total of £3,395.
‘I never thought the plan was anything but rock solid safe. Unsafe Hands is more to the point,’ she says.
A Mail on Sunday report in April found that bosses had been skimming off cash from the £65 million trust fund that was meant to pay for funerals.
Administrators FRP admitted last week it had recovered only £3.7 million in cash of the £65 million that should have been ring-fenced in an independently run trust fund to cover the cost of funerals.
Company accounts show money from this vital trust fund was routinely being paid into Safe Hands’ general company coffers. The company was then paying large sums of money to its shareholders.
Having insufficient money set aside to pay for funerals that Safe Hands had promised to customers ultimately pushed the company to the point of collapse.
The absence of regulation in the pre-paid funeral industry allowed successive owners of Safe Hands to divert money from the trust fund, much of it into offshore accounts.
Victim: Kim Sharp, who paid £3,395 for a funeral plan, says the company should be renamed Unsafe Hands
The Financial Conduct Authority named Empathy (Empathy Funeral Plans UK Limited) and Unique (Fox Milton & Co Limited, trading as Unique Funeral Plans) as the two companies that they ‘strongly advise’ those planning their funerals to avoid
Ironically, the firm’s demise appears to have been triggered when the FCA announced it would finally begin overseeing such firms from this July.
Safe Hands withdrew its application to be accredited by the regulator in February when it became clear that it would not meet the required standards.
Devastated pensioners have lost their money, their funerals and the peace of mind that the pre-paid plan was supposed to provide.
Unique Funeral Plans had stated that their payments are held in the secure Unique Funeral Plans Trust, which is independently managed by The Sterling Trust Corporation Ltd.
But Sterling responded that it has not been appointed to act as a trustee and as such ‘these statements are not true’.
Thousands of customers who have paid for funeral plans risk losing ‘significant’ sums of cash following a major industry clampdown (stock photo used)
The FCA strongly advises people against taking out a pre-paid funeral with Unique Funeral Plans.
The FCA has published a list detailing which firms have withdrawn their applications to be authorised or been refused them, those yet to apply for authorisation, as well as those that are transferring their customers to other providers.
If your funeral plan is with one of these companies, the FCA is advising you get in touch with your current provider for more information.
The FCA website says: ‘We advise that you do not buy a new funeral plan from these providers.
‘If you have an existing plan with them, and haven’t heard from them, get in touch with your provider as soon as possible.
‘Existing plan holders can ask for their plan to be cancelled and request a refund of any money paid into the plan.
‘However, customers should be aware there may be a cancellation fee and should check the terms and conditions of their contract with the firm.’
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