Funeral Homes and the Funeral Law – RIP or Rip-off?

According to a Federal Trade Commission (FTC) report filed in March 2009, approximately one-fourth of the funeral homes investigated by undercover federal investigators violated the Funeral Rule significantly during 2008. These federal investigators visited 104 funeral homes in seven states, part of an undercover inspection of funeral homes conducted every year to help ensure compliance and maintain consumer confidence.

The Funeral Rule requires funeral homes to provide consumers with an itemized price list of products and services at the start of a discussion at the home of funeral arrangements, and to show them a casket price list before they view any caskets. This ruling also allows consumers to purchase only the funeral arrangements they want. Consumers also have the right to buy separate goods (such as caskets) and services (such as embalming or a memorial service).

Funeral homes found to have significant violations can choose to enter the Funeral Rule Offenders Program (FROP) as an alternative to the prospect of a lawsuit that could lead to a court order and civil penalties. The FROP is a three-year compliance training and monitoring program run by the National Funeral Directors Association (NFDA). Funeral homes that participate in the program make a voluntary payment to the U.S. Treasury in place of a civil penalty, and they pay annual administrative fees to the NFDA.

According to the FTC press release, “Annual undercover investigations serve two purposes,” said Eileen Harrington, Acting Director of the FTC’s Bureau of Consumer Protection. “They help ensure that funeral homes are playing by the Funeral Rule, and they protect consumers, who can shop for a variety of funeral goods and services with confidence. The Rule – and these undercover investigations – make it possible for people to compare prices and buy only those services they want or need.”

Here are some of the FTC findings:

  • In Fairbanks and Anchorage, Alaska, two of 11 funeral homes inspected had significant violations; five had minor compliance deficiencies.
  • In Northeastern Arkansas, 11 of 15 funeral homes inspected had significant violations; four had minor compliance deficiencies.
  • In Orange County, California, two significant violations were found among 18 funeral homes inspected; nine had minor compliance deficiencies.
  • In Minneapolis/St. Paul, Minnesota, one of 16 funeral homes inspected had significant violations; seven had minor compliance deficiencies.
  • In Nassau County, New York, two of 18 funeral homes inspected had significant violations; three had minor compliance deficiencies.
  • In Toledo, Ohio, one of 15 funeral homes inspected had significant violations; nine had minor compliance deficiencies.
  • In San Antonio, Texas, seven of 11 funeral homes inspected had significant violations; one had minor compliance deficiencies.

Funeral homes that participate in the FROP program receive compliance training, legal review of price list disclosures required by the Funeral Rule, and regular testing and compliance monitoring. When investigators find minor compliance deficiencies, the funeral home receives a notice requiring it to provide evidence that it has corrected the problem.

In general, the Funeral Rule requires:

  • Funeral homes to give consumers an itemized General Price List (GPL) at the beginning of an in-person discussion of funeral arrangements, and show them a Casket Price List before they view caskets.
  • The Rule also prohibits funeral homes from requiring consumers to buy any item, such as a casket, as a condition of obtaining any other funeral good or service. By requiring itemized prices, the Rule gives consumers the ability to compare prices among funeral homes and buy only the goods and services they want.

Since the FROP program began in 1996, the FTC has inspected more than 2,150 funeral homes and referred more than 300 funeral homes to the FROP program. In conducting these enforcement sweeps, the agency has benefited from the assistance of several state attorneys general and the AARP.

In addition to its law enforcement efforts, the FTC educates consumers in English and Spanish about their rights under the Funeral Rule, and provides guidance to businesses in how to comply. During 2008, the agency responded to requests for more than 100,000 copies of three of these publications: “Paying Final Respects: Your Rights When Buying Funeral Goods & Services,” “Funerals: A Consumer Guide,” and “Complying with the Funeral Rule.” Consumers also have accessed information about the Rule more than 138,000 times during 2008 from the FTC’s Web site, www.ftc.gov.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

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