FUNERAL HOME SUED BY FTC FOR FAILURE TO COMMUNICATE PRICES TO CONSUMERS

FROM:  FEDERAL TRADE COMMISSION 
FTC Sues Funeral Home for Failing to Disclose Prices

The Federal Trade Commission charged Ross-Clayton Funeral Home Inc. in Montgomery, Ala., and its owners, David C. Ross, Jr. and Eleanor Lewis Dawkins, with violating the FTC’s Funeral Rule, which requires funeral providers to provide consumers with important pricing and other disclosures when making funeral arrangements.

The FTC’s complaint alleges that on at least two occasions the funeral home failed to provide a casket price list at the time and manner required by the Funeral Rule for in-person discussions of funeral arrangements.

The FTC conducts undercover inspections across the country every year to ensure that funeral homes are complying with the Funeral Rule. First-time offenders cited for significant violations are offered a chance to enter the Funeral Rule Offenders Program (FROP), a three-year training program designed to increase compliance, as an alternative to possible legal action, a court order, and civil penalties of up to $16,000 per violation. The FROP program is run by the National Funeral Directors Association (NFDA) and provides participants with a review of price lists and disclosures, ongoing training, follow-up testing, and certification of compliance with the Rule.  Participants also must make a voluntary payment to the U.S. Treasury for an amount less than what likely would be sought if the Commission authorized filing a lawsuit for civil penalties, and pay annual administrative fees to the NFDA for each year of training. The defendants refused the opportunity to resolve their alleged violations by participating in the FROP program.

The Funeral Rule, enacted in 1984, gives consumers the right to receive information about funeral products and services so that consumers pay only for what they want and need.  Key provisions of the Rule require funeral homes to provide consumers with an itemized price list at the start of an in-person discussion of funeral arrangements, as well as a casket price list before consumers view any 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. The Rule requires funeral homes to provide itemized prices so that consumers can compare prices and buy only the goods and services they want.

For more information about the Funeral Rule, read Shopping for Funeral Services and Complying with the Funeral Rule.

The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Middle District of Alabama.

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.