Consumers warned against mushrooming funeral operators

People trying to profit from a disaster is like 'a pack of hyenas circling wounded prey' - Cyril Ramaphosa

None of the funeral service operators flagged by the FSCA can operate as funeral parlours or burial societies.

Funeral parlours must be registered in terms of the Health Act and with the local authority. If they also distribute funeral insurance they must be a registered underwriter that collects the premiums and issues you with a policy. Picture: 123RF/NELSON99
Funeral parlours must be registered in terms of the Health Act and with the local authority. If they also distribute funeral insurance they must be a registered underwriter that collects the premiums and issues you with a policy. Picture: 123RF/NELSON99

The financial sector watchdog warned the public to be cautious of funeral services providers mushrooming to profit from the death of thousands of South Africans falling victim to the Covid-19 pandemic.

President Cyril Ramaphosa recently referred to the action of people attempting to profit from a disaster that is claiming the lives of South Africans as “scavengers” and “a pack of hyenas circling wounded prey”.

The Financial Sector Conduct Authority warned the public against no fewer than three funeral service providers, all operating in Mitchell’s Plain in the Western Cape.

The regulator warned that Morning Star Pentecostal Funeral Fund (Morning Star), Davids Community Funeral Services (Davids Funerals) and Alpine Funeral Undertakers (Alpine Funeral) are all suspected of conducting unauthorised financial services business and breaching various financial sector laws in that they are all offering insurance services without an underwriter.

The FSCA also confirmed that neither Morning Star, Davids Funerals nor Alpine Funeral are authorised in terms of the Financial Advisory and Intermediary Services Act to render financial advisory and intermediary services.   

This follows a warning against the Free State-based Be Strong Funeral Services (Be Strong Funerals), which the FSCA says was also breaching various financial sector laws.

None of the funeral service operators flagged by the FSCA can operate as funeral parlours or burial societies, as both have contractual agreements with funeral insurers.

Burial societies entail collecting the premiums from you, the member, and then paying it over to the funeral insurer.

Funeral parlours must be registered in terms of the Health Act and with the local authority. If they also distribute funeral insurance they must be a registered underwriter that collects the premiums and issues you with a policy.

To safeguard yourself you need to check if both the parlour and the insurer are registered.

The regulator urges you to always check if an entity or individual is registered with the FSCA  by phoning toll free on 0800-110-443 or visiting its website www.fsca.co.za.

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