SALLY SORTS IT: Why didn’t card firm refund £2,945 funeral plan loss?

My disabled sister is 78 and has been in poor health for a while.

She was worried I would not be able to afford a proper funeral for her if she died before me, so took out a pre-paid funeral plan with Safe Hands about eight years ago.

As she had no savings, she paid for it with her Lloyds TSB and Aqua credit cards.

When she found out Safe Hands had gone into liquidation this year, she feared she would never get back the £2,945 she spent.

I suggested she contact the card providers for help, but she had such a hostile response from one of them she was put off pursuing the matter.

This has devastated us both and we don’t know what to do next.

K. J., York. 

Sally Hamilton replies: Your sister wanted to remove a financial burden from your shoulders in the event she pre-deceased you. But like 46,000 or so other victims of the collapse of Safe Hands in March, it meant her best-laid plans went awry.

She was left terrified the money she put in to her pre-paid plan was lost and her thoughtful actions had been in vain.

A helping hand was offered by Dignity, one of the UK’s largest providers of funerals and funeral plans. It is offering its services at no extra cost for victims who require a funeral in the next few months. Those who wish to can also transfer to a Dignity funeral plan, although they might need to pay extra.

Customers can also opt to line up with other creditors to FRP Advisory, the liquidators of Safe Hands, but it is feared any refunds will be limited due to a shortage of funds.

Your suggestion of seeking help from your sister’s card providers was sensible. The liquidators even outline this as a possible remedy. Section 75 of the Consumer Credit Act means card providers are jointly responsible with a retailer if something goes wrong with a purchase, so long as the item or service costs more than £100 and less than £30,000.

I was appalled to read your sister’s initial valid inquiry was brushed aside, so I was eager to help. With your letter you included copies of your sister’s two card receipts totalling £2,500. 

I couldn’t tell which bank was behind these transactions. Since you had mentioned Lloyds TSB, I contacted Lloyds Bank first. It had no records for your sister and suggested I try TSB, from which it split not long after she purchased the funeral plan.

I sent a request to TSB to consider a Section 75 claim and asked Aqua if its card had been used to pay Safe Hands. 

Aqua said the receipts were not made on its card but could not say which bank’s card had been used.

TSB trawled your sister’s statements and found two payments linked to Safe Hands had indeed been made using TSB cards. The bank quickly repaid her £2,500.

You said you were both in tears on receiving the news. But what of the remaining £445? Under Section 75, even if the whole bill had not been met by card, the total sum paid for the service can be claimed from the card provider.

I put that to TSB. Soon afterwards it confirmed that, on looking again, the bank found a record of a later payment for £445 and has now refunded that as well. You and your sister are thrilled and she is now deciding what to do next.

The good news, if she wants another funeral plan, is that providers must now (since the end of July) be authorised to sell them by watchdog the Financial Conduct Authority, which should offer greater peace of mind.

BT wants £1,000 to close broadband account 

My partner and I separated and I have been left to cancel all our standing orders.

When it came to closing our BT broadband account, the company said it would cost me £1,004. This is outrageous as we only opened the account in February.

When I challenged it, they said we had signed up for two years and that was the cost of getting out. I am selling the house and find this all very stressful.

G. H., Basingstoke.

Sally Hamilton replies: Breaking up is hard to do, but as you have found, the uncoupling of joint financial arrangements can add to the pain.

When you signed up for BT’s broadband package, you had no idea that your relationship would unravel a few months later.

I felt for you, as you had ended up footing the BT bill for closing the account. You don’t need the service as you told me you have moved in with your sister while the house is sold.

You told me what hurt most was BT’s total lack of empathy, with staff just quoting policy at you. I asked BT to consider taking your difficult circumstances in to account and waive the charge.

I’m afraid my efforts fell (largely) on deaf ears. BT said its exit fee was fair and meets Ofcom guidance. It said that in issuing the final bill, it had deducted VAT and other cost savings, such as payments to suppliers, given a 1 pc discount for early payment of the bill — although added VAT back on to the final calculation to reach the £1,004 total.

It did offer a tiny concession — £100 off any future deal you take with the company. I doubt that is enough to keep you loyal to BT.

Your experience is a warning to anyone signing up to a fixed-term deal to expect fees for leaving early, for whatever reason.

• Write to Sally Hamilton at Sally Sorts It, Money Mail, Northcliffe House, 2 Derry Street, London W8 5TT or email [email protected] — include phone number, address and a note addressed to the offending organisation giving them permission to talk to Sally Hamilton. Please do not send original documents as we cannot take responsibility for them. No legal responsibility can be accepted by the Daily Mail for answers given.