Funeral Consumer Society of Colorado
4101 East Hampden Ave.
Denver, CO 80222

July 11, 1999

Secretary, Federal Trade Commission
Room H-159
600 Pennsylvania Ave. NW
Washington, DC 20580
Submitted by Email to: <funeral@ftc.gov>

Subject: 16 CFR Part 453, Comments Concerning Trade Regulation Rule on Funeral Industry Practices

Dear Secretary,

The Funeral Consumer Society of Colorado is a non-profit group dedicated to providing consumers with information about the funeral industry so they can make informed choices about services and products when needed. We have approximately 5,000 members, mostly in Colorado, but some in bordering states.

First, let me state that we very strongly support FAMSA's requests for modification of the Funeral Rule. The Funeral Rule as it stands has been a boon to consumers, but over time, ceratin elements of the funeral industry have learned to exploit loopholes in the Rule, to the detriment of consumers. Therefore the Rule needs some modification to eliminate loophole. Also, some areas of the industry that did not come under the Rule must be brought under it to further protect consumers from exploitation.

We shall now respond briefly point-by-point to most of the questions you posed in your request for comments. For clarity, FTC questions are repeated in lower case, and our brief responses are given in upper case letters:

(1) Is there a continuing need for the Funeral Rule? YES, THERE DEFINITELY IS.

(a) What benefits, if any, has the Rule provided to purchasers of funeral goods and services? IT HAS HELPED PEOPLE RESIST PREDATORY SALES TECHNIQUES AND HELPED THEM GET FAIR PRICES.

(b) Has the Rule imposed costs on purchasers? IF SO, ONLY MINIMALLY.

(2) What changes, if any, should be made to the Rule to increase the benefits of the Rule to purchasers? ELIMINATE THE SO-CALLED NON-DECLINABLE FEE, WHICH HAS BECOME A CATCHALL CONCEALED PROFIT GUARANTEE FOR SOME PROVIDERS. THERE IS TOO MUCH OPPORTUNITY TO SHIFT ABUSIVE PRICE-GOUGES FROM OTHER MARKED-UP ITEMS INTO THIS FEE, WHICH GIVES CONSUMERS NO CHOICE AT ALL. NOT ALL PROVIDERS MISUSE THIS, BUT SOME DEFINITELY DO.

(a) How would these changes affect the costs the Rule imposes on the funeral providers subject to its requirements? MINIMALLY. IT MERELY REQUIRES HONESTY AND OPENNESS.

(3) What significant burdens or costs, if any, including costs of compliance, has the Rule imposed on funeral providers subject to its requirements? NOTHING VERY SIGNIFICANT TO THE HONEST AND ETHICAL PROVIDERS.

(a) Has the Rule provided benefits to such funeral providers? YES, IT ALLOWS HONEST AND ETHICAL PROVIDERS TO HAVE FAIR COMPETITION WITH THE "ETHICALLY-CHALLENGED" PROVIDERS ON A LEVEL PLAYING FIELD.

(4) What changes, if any, should be made to the Rule to reduce the burdens or costs imposed on funeral providers subject to its requirements? NONE--COSTS AND BURDENS ARE NOT GREAT.

(a) How would these changes affect the benefits provided by the Rule? IT WOULD BROADEN COVERAGE AND IMPROVE THE BENEFIT TO THE CONSUMER.

(6) Since the Rule was issued, what effects, if any, have changes in relevant technology or economic conditions had on the Rule? CONTINUED MERGERS AND ACQUISITIONS WITHOUT DISCLOSURE OF OWNERSHIP TO THE PUBLIC MAKES IT HARDER FOR CONSUMERS TO MAKE FAIR COMPARISONS.

(7) What significant burdens or costs, if any, including costs of compliance, has the Rule imposed on small funeral providers subject to its requirements? SOME INITIAL COST TO SET UP FORMS, BUT SHOULD BE MINIMAL TO UPDATE ONCE IN COMPLIANCE.

(a) How do these burdens or costs differ from those imposed on larger funeral providers subject to the Rule's requirements? LARGER PROVIDERS CAN SPREAD COSTS WIDER, OR PREPARE FORMS AND SUCH CENTRALLY FOR ALL OPERATIONS.

(8) To what extent are the burdens or costs that the Rule imposes on small funeral providers similar to those that small funeral providers would incur under standard and prudent business practices? SHOULD BE SIMILAR IF "STANDARD AND PRUDENT" PRACTICES MEANS "HONEST AND ETHICAL" PRACTICES.

(9) What changes, if any, should be made to the Rule to reduce the burdens or costs imposed on small funeral providers? UNKNOWN.

(a) How would these changes affect the benefits of the Rule? UNKNOWN.

(b) Would such changes adversely affect the competitive position of larger funeral providers? NOT IF THEY ARE HONEST AND ETHICAL.

(10) How, if at all, has the Rule affected the relative number of consumers who contact more than one funeral home before deciding which one to use? IT HAS CLEARLY INCREASED THE NUMBER.

(11) How, if at all, has the Rule benefitted consumers by:

(a) Alerting consumers to the importance of price information and ensuring that they obtain such information at the critical point of choosing a provider? IT HAS DONE SO IN MANY CASES.

(b) Providing information about different purchase options? IT IS INVALUABLE.

(c) Protecting consumers from injurious misrepresentations? IT HELPS WEED OUT THE UNETHICAL PROVIDERS, AND PROVIDES A BASIS FOR RECOURSE.

(d) Requiring authorization prior to embalming? A GREAT CONSUMER BENEFIT.

(e) Prohibiting providers from conditioning the purchase of a wanted item on the purchase of an unwanted item? A GREAT CONSUMER BENEFIT.

(12) How have prices changed (in total and for specific funeral goods and services) since the Rule was amended in 1994? To what extent, if at all, are these changes attributable to the Rule? THIS IS A MIXED BAG. SOME PROVIDERS IN OUR AREA MAY HAVE LOWERED PRICES TO A MORE COMPETITIVE LEVEL INSTEAD OF GOUGING CONSUMERS. OTHERS HAVE GONE UP, BUT PERHAPS LESS THAN THEY WOULD HAVE WITHOUT THE RULE.

(13) Have the relative prevalence of: (a) ground burials; (b) cremations; (c) above-ground entombment; or (d) other dispositions, increased or decreased since the Rule was amended in 1994? CREMATIONS MAY HAVE INCREASED. To what extent, if at all, has the Rule influenced these changes? UNKNOWN.

(14) How, if at all, since the Rule was amended in 1994, have the following factors changed?

(a) The number, size, and type of providers of funeral goods and services in the industry? SIMILAR IN COLORADO, EXCEPT MORE INDEPENDENT CASKET SELLERS NOW COMPETE WITH FUNERAL HOMES. A CONSIDERABLE NUMBER OF NEW SMALL INDEPENDENT PROVIDERS HAVE OPENED BUSINESSES.

(b) The ability of new providers, both traditional and non-traditional, to enter the industry? IMPROVED.

(c) What types of non-traditional entrants have appeared in the industry, and how are they different from traditional providers? INDEPENDENT CASKET MAKERS AND SELLERS ARE OPENING BUSINESSES.

(d) Mergers and other types of consolidation in the funeral industry? WAS STILL INCREASING IN COLORADO, BUT PERHAPS SLOWING DUE TO CONGLOMERATE FINANCIAL QUESTIONS.

(e) Profits of funeral industry members? UNKNOWN.

(15) How, if at all, has the Rule affected the cremation industry? IT PROBABLY HAS NOT, MUCH. Should the Rule be amended to include within its scope unfair and deceptive practices by crematories, if any? CERTAINLY THIS AMENDMENT SHOULD BE MADE. THIS IS PATENTLY OBVIOUS AND A "NO-BRAINER." WE ARE AMAZED YOU FEEL A NEED TO ASK SUCH A QUESTION!

(16) To what extent are providers of funeral goods and services complying with the Rule overall, and with each of its component requirements? MOST AT LEAST TRY, WITH VARIED SUCCESS.

(17) What difficulties, if any, are providers of funeral goods and services experiencing in complying with the Rule? SOME DO NOT SEEM TO UNDERSTAND THE CONCEPT VERY WELL.

(18) How has the National Funeral Directors Association's Funeral Rule Offenders Program ("FROP") affected compliance with the Rule, if at all? UNKNOWN

(19) Do consumers who receive itemized price information at the inception of the arrangements conference tend to spend less on funerals than those who receive such information later? ABSOLUTELY, IN THE CASE OF THE COST-CONSCIOUS. PROBABLY NOT IN THE CASE OF THOSE TO WHOM MONEY IS NO OBJECT.

(20) Do consumers who make pre-need arrangements spend less on funerals than those who do not? YES AND NO. If so, why? THE COST-CONSCIOUS ARE ABLE TO ARRANGE WHAT THEY WANT, NOT WHAT A SURVIVOR IS PRESSURED INTO DOING. OTHERS USE PRE-NEED NOT FOR COST BUT MERELY TO SAVE SURVIVORS FROM THE BURDEN OF MAKING ARRANGEMENTS, AND COST IS NOT ALWAYS A FACTOR. Does receiving price information at the inception of a pre-need arrangements conference contribute to decreased spending? FOR THE COST-CONSCIOUS, ABOLUTELY. Does it encourage or facilitate comparison shopping? CERTAINLY IT DOES.

(21) Should the requirement that itemized price lists be given to consumers at the beginning of discussions about funeral arrangements be modified? NO. If so, how? What would be the relative costs and benefits of such a modified provision? MODIFYING IT WOULD ALLOW THE UNETHICAL TO PRESSURE CONSUMERS BEFORE DISCLOSING PRICES FULLY.

(22) Should the Commission expand the definition of "funeral provider" in order to bring non-traditional members of the funeral industry within the scope of the Funeral Rule's coverage? ABSOLUTELY YES. Are consumers being harmed by the current limitation on the scope of the Rule's coverage? YES, ESPECIALLY WHEN ONE ENTITY CONTROLS THE FUNERAL HOME AND CEMETERY.

(a) What definition should be used to delineate those entities and individuals subject to the Funeral Rule? ONE THAT WILL INCLUDE CEMETERIES, CASKET SELLERS AND MONUMENT SELLERS.

(b) What are the costs and benefits of broader definitions? COSTS WILL AFFECT ONLY THE UNETHICAL OR DISHONEST. BENEFITS ARE OBVIOUSLY THAT CONSUMERS WILL BE BETTER INFORMED ABOUT TOTAL COSTS, NOT JUST FUNERAL COSTS.

(23) Should non-traditional providers of funeral goods and services be subject to only certain provisions of the Funeral Rule? UNDECIDED.

(a) If so, to which provisions should they be subject? AT LEAST FULL, ITEMIZED COST DISCLOSURES AT BEGINNING OF ANY TRANSACTION.

(24) Does the prohibition on more than one non-declinable fee reduce barriers to competition and increase consumer choice? PROBABLY NOT. THE NON-DECLINABLE FEE IS BEING INCREASINGLY USED AS A LOOPHOLE TO GOUGE CONSUMERS.

(a) Has this prohibition been effective to ensure that consumers can choose and pay for only the individual goods and services that they desire? YES, BUT THE BENEFIT IS LARGELY NEGATED IF THE NON-DECLINABLE FEE IS USED AS A CATCHALL AND PROFIT-GENERATOR.

(b) Has this prohibition been effective to protect consumers' right to decline unwanted goods and services? UNKNOWN.

(c) What are the benefits conferred upon consumers or competition by this prohibition? IT IS HELPFUL EXCEPT WHERE PROVIDERS HAVE PADDED THE NON-DECLINABLE FEE.

(d) What costs or other burdens has this provision imposed upon providers of funeral goods and services? UNKNOWN.

(25) What new fees, prices, goods or services have emerged in the sale of funeral goods and services, since the Rule was amended in 1994? UNSURE.

(26) Have the 1994 amendments been effective in prohibiting casket handling fees? YES. If so, what benefits or costs have resulted from these amendments? COST IS THAT CONCEALED INCREASES IN NON-DECLINABLE FEES OCCURRED WITH SOME PROVIDERS.

(27) How widespread is it for funeral providers to offer substantial discounts on funeral packages that include a casket from the funeral home? COMMON.

(a) To what extent does such discounting tend to restrict consumers' choices? UNCERTAIN.

(28) Should the requirement for a General Price List be modified? YES. If so, how? SEE BELOW.

(a) Are there any new fees, prices, goods or services which should be added to the General Price List requirements? YES.

1. Should the Rule require that the price of private viewing without embalming be included on the General Price List? CERTAINLY.

2. Should the Rule require that the price of donating a body to a medical school be included on the General Price List? CERTAINLY.

3. Are the Rule's requirements [(Section 453.2(b)(4)(ii)(C)] to disclose on the General Price List the price for direct cremation effective to prevent deception regarding the amount a consumer will pay to have a funeral provider dispose of a body by cremation? NO, A FEW IN COLORADO DO CHARGE EXTRA FOR THE ACTUAL CREMATION PROCESS, AFTER IMPLYING IT WAS INCLUDED. Should the Rule also include an express requirement that the disclosed price of "direct cremation" include the actual price to have a body cremated? OF COURSE IT SHOULD. THIS IS A SILLY QUESTION.

4. Should the Rule require that the price of renting a casket in connection with a cremation be included on the General Price List? YES, IF A RENTAL CASKET IS DESIRED, BUT IT MUST BE OPTIONAL.

(b) Are there any fees, prices or services which should be deleted from the General Price List? THE CATCHALL NON-DECLINABLE FEE.

(c) Are there any other revisions that should be made to the current provisions in the General Price List? UNCERTAIN.

(d) For any change made in response to this question, what, if any, would be the costs and benefits to consumers and to funeral providers? LITTLE COST TO THE ETHICAL AND HONEST PROVIDER. BENEFIT OF INCREASED KNOWLEDGE AND CHOICES FOR THE CONSUMER.

(29) The Rule applies to both pre-need and at-need funeral arrangements. Should pre-need and at-need consumers be treated differently? If so, why? PRE-NEED CONSUMERS MUST HAVE GUARANTEES OF SAFETY AND TRANSFERABILITY OF FUNDS OR SERVICES.

(c) Can a funeral provider readily distinguish between a pre-need and an at- need customer or will this complicate compliance with the Rule? THIS QUESTION APPEARS TO ASK IF A PROVIDER WILL KNOW IF SOMEONE HAS DIED AND A FUNERAL IS BEING BOUGHT OR WHETHER SOMEONE IS MERELY PLANNING AHEAD. THE ANSWER SEEMS RATHER OBVIOUS.

(30) Are there widespread unfair or deceptive practices occurring with respect to the pre-arrangement of and pre-payment for funerals by consumers? YES. What are these practices? NOT PROVIDING FOR ABSOLUTE SAFETY OF FUNDS, NOT PROVIDING FOR TRANSFERABILITY, DECEPTION ABOUT COST SAVINGS, IF ANY. How could these practices be remedied? WITH NEW REQUIREMENTS. Are these remedies within the Commission's authority and jurisdiction? OTHER THAN DISCLOSURE, PROBABLY NOT. IT IS MORE UP TO THE STATES TO PROVIDE FOR SAFETY AND TRANSFERABILITY RULES. Would the benefits to consumers likely to result from such remedies outweigh the likely costs to funeral providers or other industry members? OF COURSE THEY WOULD. ETHICAL AND HONEST PROVIDERS WILL NOT BE HARMED, AND WILL BENEFIT FROM RESTRICTING THE UNETHICAL AND DISHONEST ONES.

That concludes the responses from the Funeral Consumer Society of Colorado. Thank you for the opportunity to comment. We urge you strongly to take further action to PROTECT CONSUMERS.

James E. Peterson, President, FCSC

________________________________________________________

Do You Yahoo!?

Get your free @yahoo.com address at http://mail.yahoo.com