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.