Commissioner's blog: New rules to protect your final farewell
Many people worry about leaving their family with a large debt when they depart this world, so the option of paying for your funeral upfront before you need it has become increasingly popular in recent years.
So popular in fact, there is currently estimated to be around $170 million in pre-paid funeral funds invested by funeral organisers in Western Australia awaiting the day they’re needed.
WA’s ageing population means that figure is likely to grow further, so the State Government has stepped in to introduce some safeguards in the form of a new mandatory code of practice.
Pre-paid funerals allow you to pay in advance for your funeral through a funeral director at today’s prices, either in-full or via regular payments.
It’s important to note that this type of cover is different to funeral insurance, which should be treated with caution given ongoing payments are required until the day you die - meaning you could pay significantly more than the actual cover you will get.
Due to take effect on March 1 2021, the pre-paid funeral code will protect consumer’s money from potential misuse by requiring that the funds are to be managed within secure investments under the client’s name until they are required.
Prepaid funeral sellers (who are mostly funeral directors) will be required to forward all payments within 16 days of receipt to specified investment managers in the form of life insurance companies, friendly societies, licensed trustee companies or the Public Trustee of WA.
Contracts will be required to detail all the goods and services provided, including the individual cost of each component plus fees.
Prices in the contract will be fixed at the time of signing to safeguard against future cost increases and inflation, while a 30-day cooling off period will also apply.
Under the code, pre-paid funeral contracts must outline what happens if the organiser's business becomes insolvent, the client moves interstate or dies before full payment is made, if payments are missed or are late and under which circumstances a refund is payable.
In addition to the code, the Australian Consumer Law (ACL) provides some protections around the supply of goods and services, including unconscionable or misleading and deceptive conduct, as well as unfair contract terms.
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