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One in Four Funeral Homes Breaking the Law – FTC

3/30/2009 – The Federal Trade Commission issued a press release about its 2008 “sweeps,” undercover shopping trips to see if mortuaries are complying with the Funeral Rule. The Rule, in place since 1984, requires funeral homes to give consumers printed, itemized price lists and disclosures at the very beginning of any funeral arrangments discussion. Sounds pretty simple, right? So then why did 26 of the 104 funeral homes secret-shopped last year not do it?

Our guess is that – despite the FTC’s headline claiming the sweeps ensure consumers are protected – funeral homes know the FTC has little staff to enforce the 25-year-old Rule. No state consistently enforces the Rule either. Plus, offenders need only enroll in the Funeral Rule Offender’s Program (FROP), an “educational” program run by the largest funeral director’s trade association, the National Funeral Directors Association. Conflict of interest much?

The FTC’s press release is an improvement over those from the past, however. Commission staff note that some funeral homes they shopped had “significant” problems, while others had “minor” violations. In the past, the FTC would merely say funeral homes were or weren’t complying with the Rule, painting a falsely rosy picture. Of course, the FTC still won’t tell the public exactly how they’re testing for Funeral Rule compliance. Are they merely checking to see if price lists appear at the right time? Or, are they actually scrutinizing the price lists to see if consumers are being given the information and options the law requires? Here’s the release in full.

For Release: 03/19/2009

Undercover Inspections of Funeral Homes in Seven States Ensure that Consumers Receive Price Lists Required by Law

Federal investigators working undercover in seven states during 2008 found significant violations of the Funeral Rule at 26 of 104 funeral homes visited. The Federal Trade Commission, which enforces the Funeral Rule, conducts undercover inspections of funeral homes every year to help ensure compliance and maintain consumer confidence. The Funeral Rule requires funeral homes to give consumers an itemized price list of products and services at the start of a discussion at the home of funeral arrangements, and show them a casket price list before they view any caskets.

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.

“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.”

FTC inspections during 2008 revealed a mixed compliance record:

* 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 benefitted from the assistance of several state attorneys general and the AARP. This year, the FTC wishes to thank Minnesota Attorney General Lori Swanson and her St. Paul staff for their invaluable assistance.

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,

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.

MEDIA CONTACT:Consumer Information:
Frank Dorman,
Office of Public Affairs
Craig Tregillus,
Bureau of Consumer Protection



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