Blaenau Gwent MP Nick Smith has responded to the Treasury accepting that they were aware of concerns about Safe Hands funeral plans five years before the company collapsed (https://www.thetimes.co.uk/article/treasury-was-alerted-about-safe-hands-funeral-firm-bvcfq5qx7), saying that opportunities were missed to warn customers.
When Safe Hands collapsed in early 2022 it left 46,000 people more than £60m of pocket.
Mr Smith is supporting constituents who lost money:
– Gary and Glenys Godwin, 80 and 79, of Nantyglo lost nearly £6,000
– Alan and Barbara Richards, 80 and 79, of Rassau lost more than £2,000.
In a response to an FOI from Mr Smith the Financial Conduct Authority confirmed that in February 2015, one month after Safe Hands was set up, they had written to the newly established firm with concerns about how it was being run.
In 2017 funeral company Dignity and Fairer Finance met with the Treasury to raise concerns about pre-paid funeral plan firms.
James Daley, head of Fairer Finance, has said that in meetings with the FCA and the Treasury he singled out Safe Hands as “a major risk”.
Mr Smith said: “Multiple red flags were raised about how Safe Hands was being run, from its beginning to its collapse eight years later. Industry concerns about Safe Hands were unfortunately not something its customers were made aware of.
“My question is whether at any stage the FCA considered telling consumers, including Safe Hands customers, about these concerns. And if so, what was their conclusion?
“By 2017 a constituent of mine – a retired school caretaker – had fully paid up a Safe Hands policy worth nearly £6,000. Until Safe Hands collapsed, he had assumed his funeral costs were covered. Had he known the risks here he could have withdrawn his funds and made alternative arrangements. Instead, he and 46,000 other people were left out of pocket and without a funeral plan.
“I’m also troubled that the Treasury missed an opportunity to prepare for some of the problems that came with bringing this sector under regulation.
“Fairer Finance wrote to the Treasury in June 2021 with concerns. The Treasury’s response, which I have seen, acknowledges that some firms would not meet the threshold for authorisation and therefore there was a risk of some providers being ‘unable to deliver on their customer’s policies’. So, while the Treasury trumpeted the new regulations as a way of preventing firms from failing their customers in the future, there was nothing in place to help those customers already at risk of losing money they had paid in, like my constituents.
“I will be meeting with the Economic Secretary to the Treasury to discuss this further, as he agreed to do when I raised this in Parliament. It would also be good if the Treasury Select Committee looked into this matter.”