FTC Covert Funeral Home Investigations Reveal Violations

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Posted on March 29, 2017 by Funerals360

February 15, 2017 via FTC News

Federal Trade Commission investigators working undercover in nine states found failures to disclose pricing information to consumers, as required by the FTC’s Funeral Rule, in 31 of the 133 funeral homes they visited during 2015 and 2016.

The FTC conducts undercover inspections to ensure that funeral homes comply with the Funeral Rule. Issued in 1984, the Rule gives consumers important rights when making funeral arrangements. Key provisions require funeral homes to provide consumers with an itemized general price list at the start of an in-person discussion of funeral arrangements, 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 the provision of itemized prices, the Funeral Rule enables consumers to compare prices and buy only the goods and services they want.

Funeral homes that violate the price list disclosure requirements for the first time can enter the Funeral Rule Offender’s Program (FROP), a training program run by the National Funeral Directors Association (NFDA) designed to increase compliance with the Funeral Rule.  All the homes found in violation during the past two years have chosen to enter the FROP rather than subject themselves to the possibility of an enforcement lawsuit seeking civil penalties of up to $40,654 per violation. The FROP provides participants with a legal review of the price disclosures required by the Rule, and on-going training, testing and monitoring for compliance. 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 NFDA.

The results of the FTC 2015-2016 undercover inspections for price list disclosures by region are as follows:

  • In Bakersfield, California, none of the 10 funeral homes inspected in 2016 failed to make a price list disclosure;
  • In Atlanta, Smyrna and Marietta, Georgia, one of the 10 funeral homes inspected in 2015 failed to make a price list disclosure;
  • In Detroit, Warren and Ann Arbor, Michigan, 10 of the 15 funeral homes inspected in 2015 failed to make a price list disclosure;
  • In St. Louis, Missouri, three of the 16 funeral homes inspected in 2015 failed to make a price list disclosure;
  • In Alamogordo and Roswell, New Mexico, nine of the 14 funeral homes inspected in 2016 failed to make a price list disclosure;
  • In Bismarck, North Dakota, none of the six funeral homes inspected in 2016 failed to make a price list disclosure;
  • In Oklahoma City, Oklahoma, four of the 34 funeral homes inspected in 2015 failed to make a price list disclosure;
  • In Fairfax, Loudoun and Prince William Counties in Virginia, two of the 17 funeral homes inspected in 2016 failed to make a price list disclosure; and
  • In Tacoma, Washington, two of the 11 funeral homes inspected in 2015 failed to make a price list disclosure.

Since the FROP began in 1996, the FTC has inspected more than 3,000 funeral homes and found 530 homes with violations. In addition, the FTC identified a number of homes, within the nine states, with only minor compliance deficiencies. In such cases, the FTC requires the funeral home to provide evidence that it has corrected the problems.

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