Purveyors of funeral expenses policies may soon have to operate under the same laws applying to all other financial products.
Federal Treasurer, Josh Frydenberg, recently unveiled consultation draft laws aimed at protecting people from being ripped off by funeral insurance plans that pressured vulnerable consumers. This includes those in Indigenous communities.
The announcement follows the banking royal commission recommendations and revelations that some customers spent thousands of dollars on funeral plans that proved insufficient, too expensive or otherwise inappropriate.
Currently, providers of these products are basically unregulated. The draft regulations require providers to hold an Australian Financial Services Licence (AFSL) and be fully regulated by the Australian Securities and Investments Commission (ASIC).
Providers of funeral bonds who operated under the exemption would also be required to hold an ASFL licence.
The regulations would not require funeral directors to hold a licence when distributing a funeral bond in conjunction with the arrangement of a prepaid funeral, cremation or burial service.
A year after her husband's funeral, National Seniors member, Paula received a letter from Centrelink’s accounts payable department telling her she owed $5,074 and 55 cents.
That was despite the fact she'd been paid just $770 bereavement allowance.
Find out how Paula took Centrelink to task. Log in to your National Seniors account and keep reading via the button below.