Comments please

Fran Hall

The Competition and Markets Authority’s investigation into the funeral market is steadily progressing, with 22 working papers published since the end of January.

It is clear that the 25-strong team working on the Market Investigation are doing a detailed and thorough job as they forensically analyse the huge amount of information they have obtained and publish their findings.

This is a once in a generation opportunity to re-shape the funeral market, and we strongly recommend that all readers of this blog find the time to share their views with the CMA as the emerging thoughts on potential remedies are published.

The problem is finding the time to do so – it’s dense reading and there are understandably deadlines by which the CMA is asking for responses.

The deadline for comment on the first batch of 13 working papers is this Thursday, 27th February, and to help anyone who feels that they should be offering their views but who just doesn’t have time to read through the almost 600 pages in the first set of working papers, we thought we’d share the most important points on which comment is invited.

Bear with us – this is a long post as we’ve copied and pasted directly from the Quality Regulation Remedies and the Information and Transparency Remedies papers so that readers can access the salient points and questions easily – we recommend reading through these two papers before responding to the questions.

Just copy and paste all the words in italics below and then add your thoughts on each point – once complete, please send to funerals@cma.gov.uk 

This is your opportunity to have your voice heard.

The Quality Regulation Remedies document poses some potential options that the CMA is considering:

Possible quality regulation remedies

(a)  Clear requirements for funeral directors in the form of, for example, statutory minimum standards.

(b)  Effective monitoring and enforcement of standards through, for example, a statutory licensing and inspection regime.

(c)  An appropriate body to monitor and enforce standards.

(d)  The collection and dissemination of information to customers on the quality of services provided by funeral directors.

The paper goes on to explain the reasons for the suggested remedies, and poses a number of questions:

Our initial assessment of the quality of services provided by funeral directors to customers suggests that:

(a)  During the purchase process and delivery of the funeral, customers can observe a range of quality aspects but care of the deceased, which is of considerable importance to customers, is largely unobservable, and customers vary rarely compare quality across providers;

(b)  together, this is likely to weaken the incentive for funeral directors to offer high quality in relation to those services that customers cannot easily observe and assess (ie back of house standards);

(c)  whilst funeral directors may monitor and invest in the quality of some of their services, we have not seen strong evidence of back of house quality responding to customer preferences, or that good quality provision requires high costs and prices; and

(d)  in relation to back of house quality standards, the evidence available suggests that many funeral directors provide an acceptable standard. However, there is a widespread view in the industry that some funeral directors do not.

Remedy selection

Do you agree with our proposal to focus quality regulation on the services provided by funeral directors or do you think we should also regulate the quality of services provided by crematoria operators? Please explain your answer.

Do you agree with our proposal to focus quality regulation on back of house standards? Please explain your answer.

What are your views on the likely effectiveness and proportionality of the remedies outlined in this working paper in addressing our initial concerns?

Are there any other potential remedies that we have not considered in this working paper that may address our initial concerns (as set out in our working paper on the quality of back of house funeral director services)? Please explain what those remedies are and why they would be more effective than, or suitable in addition to, our proposed remedies.

Would a predominantly outcomes-based or a rules-based regulatory model (see paragraphs 39 to 40) be more appropriate for monitoring and upholding the back of house standards of funeral directors? Please explain your answer.

Which of the services provided by funeral directors should be included under the scope of any quality regulatory regime, including statutory minimum standards, and why? We are particularly interested in your views on the regulatory standards set out in Table 1 and the following specific issues:

(a)  Is refrigeration necessary for the appropriate care of the deceased?

 (b)  Is the ratio of one refrigeration space for every 50 deceased persons taken into the care of the funeral director on average per year (as proposed in the draft Code of Practice for Funeral Directors in Scotland) an appropriate ratio? If not, what is?

(c)  Is it appropriate to require that each deceased must be stored individually in separate compartments within the unit (as proposed in the draft Code of Practice for Funeral Directors in Scotland)?

 (d)  Should training and/or education be mandatory? Please explain your answer. In the event that training and/or education was made mandatory, please comment on:

(i) Which members of staff require formal education and to what level (ie A Levels (or equivalent) or a degree or professional qualification) and to what extent can formal education be substituted by experience or other forms of training?

ii) Is it necessary to create a nationally accredited professional education programme or allow funeral directors to choose from the currently available qualifications?

 (iii) Should there be a number of specified hours of training, and any other form of CPD, that staff should be required to complete each year, or should staff or their employers self-assess their professional development needs?

 (iv) Are there any other requirements that should be imposed on staff, owners and controllers of funeral directors to ensure their technical and professional competence (eg age, conduct or experience restrictions)?

 (e) Is there a need to establish an independent ADR scheme and/or complaints adjudicator in addition to the funeral directors’ own complaint handling and customer redress?

Who is best placed to monitor and enforce compliance with quality regulation?

 (a)  Is a single UK-wide body or a different body in each part of the UK more appropriate, and how should either arrangement take account of the emerging regulatory regime in Scotland? Please explain your answer.

 (b)  What role, if any, should the existing trade associations (ie NAFD and SAIF) and other relevant organisations, such as the Good Funeral Guide, play in relation to the quality regulatory regime? Please explain your answer.

Should a licensing and inspection regime (see paragraphs 52 to 73) apply to individuals or businesses or both, and why? If both, what should be the respective obligations of individuals and businesses?

What considerations should be taken into account when designing any quality regulatory regime to enable providers of all sizes to comply with that regime, and without deterring innovation, entry and expansion?

 (a)  What would be the likely costs of quality regulation to funeral directors? This includes the costs of implementing any changes necessary to comply with the regulation and the costs of demonstrating ongoing compliance with the regime.

(b)  What would be the likely costs of implementing and running the regime and how should this be funded?

Are there any elements of quality that require immediate attention prior to the establishment of a quality regulatory regime?

Do you think we should tailor any aspects of quality regulation to reflect any differences in funeral service provision (and the current statutory regimes) across England, Wales, Northern Ireland and Scotland?

What information on the quality of services provided by funeral directors should be collected and disseminated to customers to enable them to assess and compare funeral directors?

 

The Information and Transparency Remedies paper identifies seven possible remedies and poses questions on each of them:

Possible information and transparency remedies

Invitation to comment

Our emerging thinking on remedies is without prejudice to the final outcome of our assessment on whether there are any AECs (adverse effects on competition) in relation to the services provided by funeral directors and crematoria operators and any detrimental effects on customers resulting from those AECs.

We welcome views from parties on the remedies described below, and the relative attractiveness of the different approaches to achieving their aims. We invite parties’ views on the following:

(a)  What are the expected costs to funeral directors and/or crematoria of implementing the remedy and reporting compliance?

(b)  How should compliance with the remedy be demonstrated and how should this be supervised by the relevant bodies?

(c)  Should any remedies be time-limited? If so, why?

(d)  Should we consider a firm size threshold for any of the remedies discussed here? And if so, what should that threshold be, and why?

(e)  Are there any relevant customer benefits in either market that may be lost or reduced by the implementation of these measures and that we should consider as part of our assessment of any remedy package?

(f)  Are there any other remedies that may equally or more effectively improve the availability and transparency of information to consumers?

 

Remedy 1 – Price transparency and comparability

There are several options (or combinations of options) that could achieve the objectives listed above that we think are worth exploring in more detail. We could, for example, require funeral directors and crematoria operators to:

(a)  make their prices available online, over the telephone, or in branch (ie before the arrangement meeting with a potential customer).

(b)  provide prices to potential customers at their first point of contact (whether in branch, over the telephone or online) rather than upon request by the customer.

(c)  adopt the same price reporting template whether they sell directly to customers (whether in branch, over the telephone or online) or through a third-party platform.

(d)  provide disaggregated pricing and service information, such as:

(i)  specific component prices (eg car, collection, transport and storage of the deceased, coffin, embalming, etc) or a package of specific components (eg those components that could be mandatory); and

(ii)  disbursement costs (eg celebrant, flowers, etc), in order to convey typical total costs (even when these disbursements are nil, such as for ministers belonging to the Church of Scotland), including information and general advice on a typical range of disbursements.

(e)  offer the same price across all of their sales channels; and

(f)  facilitating all of the above by, for instance, establishing an independent platform that could allow customers to compare providers and build their own funeral package by selecting individual elements. We discuss this part of the remedy in more detail below.

Invitation to comment on Remedy 1

We invite views on the following questions:

(a)  How can we best facilitate shopping around and increase customer awareness of total funeral costs and local price differentials?

(b)  How can we enable better comparison of funeral directors’ prices and quality of services?

(c)  How can we better prepare the customer for the arrangement meeting and make them aware of all the options offered by the funeral director, including low-cost options?

(d)  How can we give customers a clearer idea of the final cost (early on in the process of choosing a funeral director and before the arrangement meeting)?

(e)  How can we make the platform most useful for customers how can we ensure that it is used by as many customers as possible?

(f)  Should funeral directors and crematoria operators be required to adopt a standardised methodology for presenting pricing and service data as an alternative to the platform?

(g)  Should crematoria availability be incorporated into the platform?

(h)  What will be the likely costs of this remedy?

(i)  Will this remedy give rise to any potential unintended consequences?

  

Remedy 2 – Intermediaries to (more effectively) inform customers of their options and encourage shopping around

The CMA could develop guidance or ask a third party, such as the Care Quality Commission (CQC), to develop guidance to support intermediaries in their discussions with the bereaved about funeral planning. These discussions could take place when an individual enters a care home or hospice, or when death is anticipated or has just occurred. The guidance could include the following information:

(a) Explaining to the bereaved that they can change funeral director after the deceased has been collected from the place of death and that they are not obliged to remain with the funeral director that collected the deceased.

(b)  A checklist of questions that customers may wish to ask the funeral director.

(c)  Funeral directors and crematoria in the local area (and possibly their prices).

(d)  Information on the platform.

Invitation to comment on this remedy

We invite views on the following questions:

(a) Are there intermediaries other than the CQC who provide, or are well placed to provide, information on funeral planning to those close to death or to the bereaved?

(b) Are other ways in which funeral directors and crematoria operators can raise awareness of the platform other than providing information on their websites and promotional material and discussing the platform at the arrangement meeting?

(c) Are there alternatives to raising awareness of the platform to general advertising and the use of intermediaries?

(d) What are the likely costs of this remedy?

(e) Will this remedy give rise to any potential unintended consequences?

 

Remedy 3 – Funeral planning awareness before the point of need

The CMA could recommend to Government to invest in and run media campaigns and produce literature about funeral planning, as well as raising awareness of the platform described under Remedy 1.

The CMA could also recommend that local authorities, specifically those individuals or teams responsible for bereavement services, raise awareness about funeral planning on their website and through wider outreach work in their local areas.

The CMA could also work with the Citizens’ Advice Bureau and other similar organisations to develop information and guidance on funeral planning.

Invitation to comment on this remedy

We invite views on the following questions:

(a)  Are there particular circumstances prior to the point of need at which consumers are likely to be receptive to the idea of preparing for their funeral or that of a loved one?

(b)  What interventions (if any) are likely to encourage funeral planning and how might they be delivered?

(c)  Should this remedy target particular types of consumers?

(d)  What are the likely costs of the remedy?

(e)  Will this remedy give rise to any potential unintended consequences?

 

Remedy 4 – Mandatory ‘reflection period’

We could require funeral directors to allow customers a ‘reflection period’, which could take place either before or after the customer signs the contract with their chosen funeral director. We could also require funeral directors to allow customers to choose a different provider or different services from the same provider at minimal or no additional cost.

Customers do not currently have the same statutory cancellation rights for an ‘on-premises contract’, such as when a contract is concluded in the funeral directors’ office.

The potential ‘reflection’ period remedy could take one of the following forms:

(a)  impose a mandatory pause or ‘reflection’ period between an arrangement meeting on-premises and before signing any contract; or

(b)  have cancellation rights for on-premise contracts in line with the cancellation rights for off-premise and distance contracts described above.

Invitation to comment on this remedy

We invite views on the following questions:

(a)  Is a ‘reflection period’ an effective mechanism for encouraging customers to ensure that they choose a funeral director that best meets their needs?

 (b)  If so, when should this ‘’reflection period take place?

(i)  After getting information on funeral options from a funeral director on its premises and before signing the contract?

(ii)  after signing the contract in an arrangement meeting but having cancellation rights for a certain period of time afterwards? or

(iii)  another suitable time?

(c) What are the likely costs of this remedy?

(d) Will this remedy give rise to any potential unintended consequences?

 

Remedy 5 – Potential cap on the level of charges incurred for the collection, transportation and storage of the deceased

Invitation to comment on this remedy

To reduce this potential barrier to switching, we could set a cap on the level of charges that a funeral director can levy for the collection, transportation and storage of the deceased to recover the costs that the funeral director has incurred prior to the customer switching to an alternative funeral director (or the costs incurred if the customer chooses not to switch). We envisage that such a cap could apply to all funeral directors (and not a subset of funeral directors) to ensure that this possible barrier to switching is addressed across the whole sector.

We invite views on the following questions:

(a)  Will the imposition of a cap on the collection, transportation and storage of the deceased encourage more customers to switch funeral directors after having reflected on their original choice of funeral director?

 (b)  How should the cap be calculated?

(i)  Should the charge for collection and transport reflect the distance covered by the funeral director or represent an average cost?

 (ii)  Should there a daily charge for the storage of the deceased or an average charge for storage, which reflects the average length of time that the deceased is typically stored?

 (c)  Are there other approaches to setting a potential cap on charges levied by funeral directors for the collection, transportation and storage of the deceased (other than cost-based approaches) that the CMA should consider?

(d)  What are the likely costs of this remedy?

(e)  Could this remedy give rise to any unintended consequences?

 

Remedy 6 – Managing conflicts of interest

We could impose prohibition of certain forms of payment, such as:

(a) partnership agreements with hospices or care homes which involve direct referral payments when the hospice or care home facilitates an introduction to a funeral director business; and

(b) commissions to employees for upselling funeral packages

Invitation to comment on this remedy

We invite views on the following questions:

(a)  Are there any other ways to eliminate conflicts of interest that may adversely impact the quality of service provided by funeral director to customers?

(b)  Are there any other types of inducements or payments that should be captured by this remedy?

(c)  What are the likely costs of this remedy?

Remedy 7 – Disclosure of business ownership and other commercial relationships

The CMA could require funeral directors and crematoria operators to disclose their business ownership structure. This remedy could apply to branches that form part of a larger funeral director business, so that customers are aware of whether the funeral director is part of a larger business or is, instead, an independent business. This information could be disclosed on premises and websites and any other promotional material.

The CMA could also require funeral directors and crematoria to inform customers of any changes in ownership, such as when an independent funeral director is acquired by a larger multi-site operator, so that customers are aware of the current ownership structure.

The CMA could also require funeral directors to disclose when they recommend a crematorium that is owned by the same company as the funeral director business, in order to address the presence of vertical integration in the funerals sector.

Invitation to comment on this remedy

We invite views on the following questions:

(a)  What potential harm could the non-disclosure of business interests and other commercial relationship cause customers?

 (b)  What business relationships and other commercial relationships should be disclosed to customers?

(c)  How should such interests and relationship be disclosed to customers?

(d)  What are the likely costs of this remedy?

 (e)  Will this remedy give rise to any potential unintended consequences?