Fraud investigators have opened an inquiry into the collapse of a Yorkshire-based funeral plan provider.
Wakefield firm Safe Hands Plans collapsed last year, after 46,000 customers had paid into it, expecting a contribution towards future funeral costs. The Serious Fraud Office (SFO) said it is investigating a suspected fraud at the company and its parent, SHP Capital Holdings Ltd.
Funeral plans have been marketed for years as a way for people in the later stages of their lives to put aside a little money each month so their families are not burdened with a massive bill when they die. The plans became particularly popular as funeral prices soared, but there have also warnings, with critics saying there is little or no protection should the provider go bust and not be able to uphold its end of the deal. Some also criticised the large administration costs that funeral plan providers charge customers.
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SFO director Nick Ephgrave said: “Thousands of individuals from all corners of the UK lost peace and security after being sold a product on the basis it would help reduce the burden on their loved ones upon their death. Today, we have taken decisive next steps in our full criminal investigation into Safe Hands Plans.”
The SFO has written to stockbrokers, financial institutions, banks and other witnesses as part of the probe. Safe Hands went into administration in March last year, with administrators saying the company faced a “combination of factors, some of which are understood to be linked to the Covid-19 pandemic”.
FRP Advisory, which is running the administration, has previously said it is investigating why the scheme failed and the conduct of directors. After the collapse the provider was no longer able to uphold its pledge to ensure that someone’s funeral was paid for when they died.
FRP said creditors of the company have claimed around £70.6m. It said Safe Hands had used the money it got from customers to make investments and pay for the cost of administering the plans.
Administrators are now selling off these investments so they can return some money to customers. But they warned there is a “shortfall”, which means that the value of these investments is not enough to meet the company’s funeral obligations.
Original artice – https://business-live.co.uk/all-about/yorkshire-humber