By Alan Marx, AARP Tennessee Consumer Watchdog
Benjamin Franklin usually is credited with originating the phrase “in this world nothing can be said to be certain, except death and taxes.” This month’s blog is about the inevitable, but as a fair warning it is not about taxes.
There are few times in life when people are especially vulnerable. One of the most difficult times is when dealing with death, especially an unexpected death. A wave of emotions, including grief and sadness, leaves many otherwise careful consumers unable to focus on the decisions necessary to arrange for a funeral. While most funeral directors probably are caring individuals, considerate of the vulnerability of their clients, and anxious to comply with the high ethical and legal standards for their profession, there is ample evidence on the internet from litigation and settlements to show that some directors are bad apples. The abuses that those individuals have inflicted in the funeral industry are appalling.
The Funeral Rule
On April 30, 1984, the Federal Trade Commission (“FTC”) used its rulemaking authority to issue the Funeral Rule, which it later revised in 1994. The Funeral Rule requires funeral providers to give consumers “accurate, itemized price information and various other disclosures about funeral goods and services.” While the Funeral Rule has several goals, one of the goals is to provide consumers with information that enables them to make comparisons when choosing the essential components for this difficult purchase. The Funeral Rule prohibits funeral providers from
- misrepresenting legal, crematory, and cemetery requirements;
- embalming for a fee without permission;
- requiring the purchase of a casket for direct cremation;
- requiring consumers to buy certain funeral goods or services as a condition for furnishing other funeral goods or services; and
- engaging in other deceptive or unfair practices.
The Funeral Rules apply to both pre-need and at-need funeral arrangements. Violations are subject to penalties of up to $16,000 per violation.
One of the specific requirements of the Funeral Rule is the General Price List (“GPL”), which must contain itemized prices for the various goods and services that every funeral provider must give to anyone who asks, in person, about funeral goods or services, or about the prices of those goods or services. The funeral provider must give a copy of the GPL free of charge to those individuals to keep, even if the persons asking are competitors, journalists, or representatives of businesses, religious societies, government agencies, or consumer groups. The triggering event is the first face-to-face meeting, no matter where it takes place. In most states if a telephone or written communication occurs and then is followed by a meeting, the GPL must be provided at the time of the meeting. However, there are states that specifically require funeral providers to mail a price list upon request.
The GPL must contain six disclosures:
- The consumer’s right to select only the goods and services desired, although there may be a non-declinable services fee for the funeral provider’s basic services and overhead. Customers must be told that they will be charged only for the items they have selected or that are required by law or by the cemetery.
- Except in certain special cases, embalming is not required by law unless the consumer selects a funeral with viewing. However, if state or local laws in the area do not require embalming for a viewing or funeral, the consumer must be informed in the GPL
- Alternative containers for direct cremation. If direct cremation is offered, this disclosure must be placed next to the price range for the cremation, and the specific kind of containers offered must be described.
- The basic services fee.
- The Casket Price list.
- The Outer Burial Container Price List, along with a statement that in most areas of the country state or local laws do not require a container to surround the casket in the grave. The statement must say that many cemeteries require a container so that the grave will not sink in, but that either a grave liner or a burial vault will satisfy these requirements.
Customers must be given accurate information. It is a violation of the Funeral Rule to tell consumers that state or local laws require certain practices if that is not true in the location where the burial or cremation will occur.
Prices for goods or services that consumers choose to purchase from a funeral provider may not be inflated if those consumers choose not to purchase other goods or services from the funeral provider. Companies, including Walmart and Costco, sell coffins. Under the Funeral Rule, the consumer has the right to decide what he or she wants. Funerals are expensive, often exceeding $7,000. A funeral should not be the cause of ongoing financial distress.
The FTC provides several free publications for consumers who need guidance in dealing with funerals. You can also download a pdf files, including “Shopping for Funeral Services” and “Paying Final Respects.”
The Funeral Help Program offers a website with useful information, including descriptions of the differences in casket materials. Another useful website is the Funeral Consumers Alliance. It has affiliates in most of the states surrounding Tennessee, but thus far not in Tennessee.
An interesting alternative to a traditional burial is the approach known as a Green Burial, better known in the United Kingdom than in the U. S., but gaining popularity in the U. S. The definition of a Green Burial varies widely, but the term is widely used to describe the actual burial process, with certain common minimum standards:
- no embalming fluids;
- a biodegradable casket (not made with endangered tropical woods); and
- No vault.
Find out more about green burials through the Green Burial Council.
I attended a Green Burial several years ago. A close friend had become interested in the subject at a time when she was in good health and could have expected to remain so. She researched the topic and found a location in South Carolina that offered this alternative. All of the arrangements were made without my friend ever seeing the location, although she did send a representative. Unfortunately, death came much too soon.
The ceremony was one of the most moving I have ever attended, with family and friends doing almost everything including making the coffin. The location was in a park-like wooded area with a stream flowing through it, entirely surrounded by a beautiful forest. There are no headstones or footstones, just names on rocks to mark each grave.
Most unfortunately, violations of the Funeral Rule continue to occur. To insure compliance and determine the extent of non-compliance, the FTC conducts undercover inspections. Since 1996, the FTC has inspected more than 2,500 funeral homes. It has found approximately 400 significant Rule violations. In its most recent reporting period the FTC found significant violations in 23 of 102 funeral homes its inspectors visited in nine states. Another 33 of those funeral homes had minor deficiencies.
If you encounter a practice that seems improper, start by reviewing the free information from the FTC identified above. If your review confirms your belief that the conduct you encountered is not permitted, you can file a complaint with the FTC. You can also do so online at the Tennessee Division of Consumer Affairs, part of the Tennessee Office of Commerce and Insurance.
The National Funeral Directors Association (“NFDA”) runs a program that is an alternative to federal lawsuits. Funeral homes with significant violations can enter the Funeral Rule Offenders Program (“FROP”) for three years. FROP offers training, testing, and monitoring to obtain compliance with the Funeral Rule, with participating funeral homes making a voluntary payment to the U.S. Treasury instead of paying a civil penalty. The participants must pay annual administrative fees to the NFDA.
Proposed Update to the Funeral Rule
Consumer advocates have proposed changes to the Funeral Rule. David Balto is a well-known attorney who practices consumer protection law. He served as a senior attorney at the FTC. Mr. Balto recently wrote about a hearing held before the Congressional Subcommittee on Commerce, Trade, and Manufacturing to consider 17 proposed FTC bills. One of those bills was H.R. 5212, the Bereaved Consumer Bill of Rights Act, which would update the FTC’s Funeral Rule.
Mr. Balto supports updating the Funeral Rule, although he noted that, as presently drafted, the proposed bill would not require disclosure on the internet of the price information that must be made available under the Funeral Rule, a change that which would make price comparisons by consumers much easier and more effective. California already requires this by state law. A representative of the Federal Consumer Alliance testified that the disclosure of price disclosure on the internet is needed, and Mr. Balto agrees.
The Funeral Rule is designed to insure that consumers have accurate and reliable information so that they can make intelligent and informed choices during one of the most difficult periods of their lives. It certainly is not perfect, as shown by the number of violations the FTC has found when it has conducted inspections. More can and should be done to improve compliance, but the Funeral Rule addresses a problem that affects everyone, especially including seniors.