- McGowan Government to introduce mandatory code of practice for prepaid funerals
- Code to require clearer contracts, more secure fund management and 30-day cooling-off period
- Industry and members of the public asked to provide feedback on draft code of conduct
The McGowan Government is set to tighten regulations in the multimillion dollar prepaid funeral industry to safeguard seniors and their families from fund mismanagement.
The proposed mandatory code of practice would require more clarity in prepaid funeral contracts, introduce a 30-day cooling-off period, and require funeral providers to quarantine clients' funds in accounts separate from their own.
The proposed regulation will strengthen an existing voluntary code for the management of prepaid funeral funds - a standard already met by members of the Australian Funeral Directors' Association.
The tightened requirements will reach funeral directors who are not members of the Association, as well as 'funeral brokers', who provide prepaid funeral funds but are not certified funeral directors.
The proposed mandatory code of practice under the Fair Trading Act will cover all sellers of prepaid funeral packages. Requirements in the proposed code include:
- Information that must be included in a prepaid funeral contract, including what happens in the event of late or missed payments or the death of the consumer before final payment is made if they are paying by instalments;
- Funds to be held by the WA Public Trustee or an investment manager regulated by the Commonwealth Government;
- Consumers to be given information in writing as to how the money will be invested;
- A 30-day cooling-off period;
- Circumstances under which money paid under a prepaid funeral contract should be refunded; and
- Funeral directors to keep a register of contracts.
The State Government is urging the public and industry to provide feedback on the draft code of practice by visiting http://www.dmirs.wa.gov.au/cp-consultations
Comments attributed to Seniors and Ageing Minister Mick Murray:
"Unfortunately there is the potential in the prepaid funeral industry for unprincipled behaviour when dealing with vulnerable people, especially seniors.
"Seniors around the State have millions invested in prepaid funeral funds, and we want to make sure each and every fund is managed correctly.
"Companies selling prepaid funeral funds must be held to the highest standard and the proposed mandatory code of practice will ensure the community's expectations are clear."
Comments attributed to Commerce and Industrial Relations Minister Bill Johnston:
"The number of prepaid funeral contracts being entered into each year is rising as the population ages, and it's estimated consumer funds are worth $140 million.
"This proposed mandatory code of practice should provide a regulatory framework that will protect this major investment by seniors and keep the financial risk low.
"It's important we get the regulations right, so we urge the public and funeral directors to review the draft code of practice and let us know what you think prior to making it law."
Seniors and Ageing Minister's office - 6552 6400
Commerce and Industrial Relations Minister's office - 6552 6700