Wakey, wakey watchdog! Regulators need to clamp down on the probate plan cowboys before it’s too late, says VICTORIA BISCHOFF
Sound the alarm bells. Fire up the klaxon.
There is a new unregulated business in town. As we report, pre-paid probate plans promise families peace of mind.
The idea is that you pay several thousand pounds upfront to prevent your loved ones being hit with a big bill when you die, and protect against rising costs.
Wild west: The idea behind probate plans is that you pay several thousand pounds upfront to prevent your loved ones being hit with a big bill when you die, and protect against rising costs
It all sounds eerily familiar — and that’s because it is. They sound just like funeral plans. The same funeral plans that after years of mis-selling are finally facing a clampdown.
For years at Money Mail we warned about unfair charges, high-pressure sales tactics and concerns around the financial soundness of some providers. And as we have seen following the collapse of Safe Hands last month, we were right to be concerned.
Around 47,000 customers now face losing thousands of pounds if another company does not step in to honour their funerals.
This is what happens when unregulated companies are allowed to pocket large sums of cash for future services without any consideration of where the money is held.
I’m not suggesting that all pre-paid probate plans are bad.
But for many people, they will not be remotely suitable.
Probate is the legal authority needed to manage someone’s estate when they die. But the process varies depending on the value and complexity of the estate, and who it is left to.
Many people will not need it, and others can apply for the document themselves for a flat fee of £273.
So it is very worrying that no one is carefully monitoring how these plans are being sold or how many people have bought them — particularly when they are targeted at elderly customers who we know are susceptible to sales pitches about sparing loved ones a costly admin burden when they die.
Meanwhile, increasing numbers of providers are now popping up on Companies House.
It’s got industry experts worried and we are too. Yet the City watchdog claims its hands are tied because probate plans do not fall under its remit. If that’s so, ministers need to give the Financial Conduct Authority permission to oversee this growing industry before it’s too late.
Fuel for thought
The language used by the bosses of Britain’s biggest energy firms when questioned by MPs yesterday was chilling.
ScottishPower’s chief executive Keith Anderson warned that October could be ‘truly horrific’ without urgent intervention by the Chancellor. ‘The size and scale of this is beyond what I can deal with, beyond what I think the industry can deal with,’ he said.
Chris O’Shea, head of Centrica, which owns British Gas, added that things will get ‘worse . . . a lot worse’ without intervention.
Over to you Mr Sunak.
My uncle is wrapping up his late mother’s estate and has complained to her bank several times.
Yet rather than focusing on resolving the issue, the bank offered to pay him £80 if he withdrew his complaint and allowed his comments to be recorded as feedback.
Is this a brazen attempt to fiddle complaints figures? My uncle firmly rejected the offer.
But I’d be interested to know what the City watchdog thinks about this type of bribery. If you have ever been offered a deal, write to me at the email address below.
I was shocked to learn that my face was being used by pension scammers to target Zurich staff.
A woman, allegedly called Molly Johnston, had set up an account with networking website LinkedIn and uploaded a ten-year-old headshot of me as her picture.
She then contacted staff at the insurance firm claiming she could put them in touch with defined benefit pension transfer specialists.
Those targeted smelt a rat and raised the alarm with LinkedIn, which promptly suspended the account.
I’ve been told the matter is under investigation. So for now, I’m scouring the internet to check my obviously honest-looking face is not being misused elsewhere.