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FPCOB 2.3 Customers with a payment shortfall


FPCOB 2.3.1R

1This 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.

FPCOB 2.3.2G

1In relation to a subsisting funeral plan, a funeral plan provider should deal with customers fairly and, as far as possible, in a manner that is compatible with the customer’s best interests rule.


FPCOB 2.3.3G

1This section amplifies Principle 6 (Customers’ interests) in respect of the information and service that firms should provide to customers who have payment difficulties or shortfalls.

Dealing fairly with customers with a payment shortfall

FPCOB 2.3.4R

1The firm must deal fairly with the customer in relation to the payment shortfall.

FPCOB 2.3.5R

1Where 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.

FPCOB 2.3.6R

1The firm must allow the payment shortfall to be settled within 10 business days of the date of the communication, without penalty.

FPCOB 2.3.7R

1The firm must not impose a fee on the customer for incurring or correcting the payment shortfall.

FPCOB 2.3.8R

1The 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.

FPCOB 2.3.9R

1If 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.

FPCOB 2.3.10R

1A firm’s obligation to maintain insurance arrangements in accordance with FPCOB 3.1.8R continues despite any payment shortfall.