FTC GOES UNDERCOVER TO INVESTIGATE FUNERAL RULE DISCLOSURE NON-COMPLIANCE

FROM:  FEDERAL TRADE COMMISSION 
FTC Undercover Inspections of Funeral Homes in Eight States Test Compliance with Funeral Rule Disclosure Requirements

FTC’s Funeral Rule Requires Funeral Homes to Provide Price Lists to Consumers
Investigators working undercover in eight states found that, in 32 of the 124 funeral homes they visited during 2013, the funeral homes failed to disclose pricing information to consumers as required by the Federal Trade Commission’s Funeral Rule.

The FTC conducts undercover inspections every year to make sure that funeral homes are complying with the agency’s Funeral Rule. The Rule, issued in 1984, gives consumers important rights when making funeral arrangements. Key provisions of the Rule require funeral homes to provide consumers with an itemized general 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 and an outer burial container price list before they view grave liners or vaults. 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 Funeral Rule enables consumers to compare prices and buy only the goods and services they want.

Funeral homes with price list disclosure violations can enter a training program designed to increase compliance with the Funeral Rule. The three-year program is known as the Funeral Rule Offenders Program (FROP), and is an alternative to an FTC lawsuit that could lead to a federal court order and civil penalties of up to $16,000 per violation. It is run by the National Funeral Directors Association and provides participants with a legal review of the price disclosures required by the Funeral Rule, and on-going training, testing and monitoring for compliance with the Rule. In addition, funeral homes that participate in the program make a voluntary payment to the U.S. Treasury in place of a civil penalty, and pay annual administrative fees to the Association.

The results of the FTC inspections for price list disclosures by region are as follows:

In Palm Springs, California, 1 of 8 funeral homes inspected failed to make a price list disclosure as required;
In Southern Connecticut and Northern New Jersey, 2 of 19 funeral homes inspected failed to make a price list disclosure as required;
In Monroe, Louisiana, 8 of 17 funeral homes inspected failed to make a price list disclosure as required.
In Baltimore, Maryland, 2 of 19 funeral homes inspected failed to make a price list disclosure as required.
In Dayton, Ohio, 5 of 15 funeral homes inspected failed to make a price list disclosure as required.
In Portland, Oregon, 2 of 14 funeral homes inspected failed to make a price list disclosure as required.
In Amarillo, Texas, 6 of 19 funeral homes inspected failed to make a price list disclosure as required.
In Milwaukee, Wisconsin, 4 of 18 funeral homes inspected failed to make a price list disclosure as required.

All but two of the funeral homes with price list disclosure violations have agreed to enter the NFDA’s FROP program. The names of homes that have entered FROP are not released under the terms of the FROP program, and the FTC does not identify businesses under investigation. In addition, the FTC identified a number of funeral homes within the eight states with only minor compliance deficiencies. In such cases, the FTC contacts the funeral home and requires it to provide evidence that it has corrected the problems. Since the FROP program began in 1996, the FTC has inspected over 2,800 funeral homes, 459 of which have agreed to enter the FROP program.

The FTC educates consumers in English and Spanish about their rights under the Funeral Rule, and provides guidance to businesses in how to comply. For more information read or order Paying Final Respects:  Your Rights When Buying Funeral Goods & Services, Shopping for Funeral Services and Complying with the Funeral Rule.

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.