FTC Finds Widespread Noncompliance with Funeral Rule

Credit:healwithoil.com

On February 15, 2017, the Federal Trade Commission released the results of a series of investigations into funeral industry practices during 2015 and 2016. The report details the widespread failure of funeral homes in many parts of the United States to comply with a central provision of the FTC’s Funeral Rule. Specifically, about a quarter of the funeral homes investigated failed to provide an itemized general price list to consumers as required by law.

The level of noncompliance revealed by the investigation varied by region. For example, in Bakersfield, California, none of the 10 funeral homes inspected in 2016 failed to provide customers with an itemized price list. But in Detroit, Warren and Ann Arbor, Michigan, 10 of the 15 funeral homes inspected in 2015 failed to provide the lists. In Tacoma, Washington, two of 11 funeral homes did not give consumers an itemized list.

Enforcement Action

Since 1996, the FTC has allowed funeral homes that fail to disclose a general price list to attend the Funeral Rule Offender’s Program in lieu of paying up to $40,654 per occurrence in civil penalties. Run by the National Funeral Director’s Association, the program provides guidance on how to comply with the general price list requirement as well as on-going training and monitoring for compliance with the Funeral Rule. Participants in the FROP make a payment to the U.S. Treasury to avoid paying a fine. They also pay annual administrative fees to the NFDA.

About the Funeral Rule

The Funeral Rule is an administrative policy enforced by the FTC. It clearly outlines a number of requirements that funeral homes must meet when dealing with consumers. Among the most important of these is the provision of a “General Price List,” which details the cost of every item the funeral home provides. The funeral provider must present customers with the price list when they visit the facility in person. It must also provide prices over the phone. Additionally, staff must inform consumers that each item on the list is available on an a-la-carte basis, and avoid misleading statements about services such as embalming.

The general price list allows consumers to compare funeral pricing
Credit: connecteddirectors.com

The FTC created the Funeral Rule in 1984 to address widespread deceptive practices in the death-care industry. The mortuary world was largely unregulated before that time and many funeral directors took advantage of vulnerable clients, deceiving them into buying goods and services they didn’t need or want. Costs of certain items, such as embalming and memorial music, were typically “bundled” into funeral packages. This left clients no opportunity to choose only the services they desired. Service providers often showed grieving families elaborate caskets before informing them that less expensive versions were available. And many bereaved customers were duped into paying for “grief counseling,” embalming and other services that weren’t required.  

All of these abuses were cataloged in Jessica Mitford’s 1963 expose “The American Way of Death.” The book became a national bestseller, and led to a series of Congressional hearings. The Funeral Rule ensued.

How To Report Deceptive Practices

If you believe you have been treated unfairly by a funeral services provider, there are several avenues you can take. The Funeral Consumers Alliance can provide you with guidance on how to resolve the problem. You may also contact the Funeral Ethics Organization, or contact the NFDA for help in mediating a complaint. If the matter isn’t resolved to your satisfaction, you may also file a complaint with the FTC.