FPCOB 2.3 Customers with a payment shortfall

This section applies to a funeral plan provider dealing with a customer that has:

1. (1)

   an instalment payment funeral plan entered into on or after 29 July 2022; and

2. (2)

   a payment shortfall in relation to that instalment payment funeral plan.

The firm must deal fairly with the customer in relation to the payment shortfall.

Where the customer has a payment shortfall of 2 consecutive payments, the firm must, as soon as possible, and in any event within 5 business days of the second missed payment, provide the customer with a statement in a durable medium of:

1. (1)

   the individual payments due;

2. (2)

   the total amount of the payment shortfall; and

3. (3)

   information on the consequences and potential consequences under the funeral plan contract, if the payment shortfall is not settled within 10 business days of the date of the customer communication.

The firm must allow the payment shortfall to be settled within 10 business days of the date of the communication, without penalty.

The firm must not impose a fee on the customer for incurring or correcting the payment shortfall.

The firm must not cancel the funeral plan contract on the basis of a payment shortfall unless:

1. (1)

   The customer:

   1. (a)

      has a payment shortfall of at least 2 consecutive payments; and

   2. (b)

      has failed to settle the payment shortfall in accordance with the terms of the statement provided by the firm for the purposes of FPCOB 2.3.5R; or

2. (2)

   FPCOB 13.2.3R applies.

If the firm does not cancel the funeral plan contract on the basis of a payment shortfall, it must provide the customer with a further statement in accordance with the requirements of FPCOB 2.3.5R following each further consecutive missed payment.

A firm’s obligation to maintain insurance arrangements in accordance with FPCOB 3.1.8R continues despite any payment shortfall.