July 23, 1999
Mr. Benjamin I. Berman
Dear Mr. Berman:
The Cemetery and Funeral Program (program) of the California Department of Consumer Affairs welcomes the opportunity to comment on the Federal Trade Commission’s (Commission) Trade Regulation Rule on Funeral Industry Practices (Funeral Rule).
The program licenses and regulates some 815 funeral establishments, 203 cemeteries, and 165 crematories. The program additionally licenses and regulates funeral directors, embalmers, cemetery brokers, cemetery salespersons, and cremated remains disposers. The program oversees funeral preneed trust funds, cemetery endowment care trust funds and special care trust funds. It is our understanding that California is somewhat unique in regulating both funeral and cemetery industries through a single regulatory entity.
The 225,000 deaths each year in California represent approximately ten percent of the deaths in the United States.
California law mirrors the Funeral Rule to a great extent but does not replicate it in all aspects. Furthermore, the program’s enforcement authority focuses on state law, rather than federal law; therefore, we are unable to comment as fully on the Funeral Rule as might otherwise be anticipated. We do, however, submit the following general comments on the Funeral Rule.
1. The Definition of “Funeral
Since the adoption of the Funeral Rule in 1982, the role and function of the funeral establishment in California has changed significantly. Formerly, funeral goods and services were provided, almost exclusively, through the funeral establishment. Currently, funeral goods and some services come from a variety of providers, such as cemeteries, casket stores, or crematories in addition to the funeral establishment; and the funeral establishment at times functions as the coordinator of those providers. With a shift in how goods and services are provided, it would seem to follow that consumer protection issues, and moreover, the potential for consumer harm, follows the flow of how goods and services are provided. It seems reasonable, therefore that the Commission might give careful consideration to the Funeral Rule’s definition of funeral providers accordingly.
In this direction, in 1998 California enacted legislation requiring retail casket sellers (casket stores) to make disclosures, and provide price lists and itemized contracts similar to those required of funeral establishments (AB 1709, Alquist, Chapter 286, Statutes of 1998). In addition, the State Legislature is currently considering a measure which would require casket stores to place preneed money into trust similar to the trusting requirements for funeral establishments.
2. Casket Handling Fees Clarification
It would appear that the competitive reluctance of funeral providers to shift overhead costs and profit from the casket mark-up to professional service fees is still a clear dynamic, with respect to casket handling fees. It would seem that true competition in this area could ultimately benefit the consumer. While funeral establishments have countered the prohibition against casket handling fees by offering discount packages, it would seem appropriate to continue to allow discount packages as long as it promotes competition in sales to consumers.
The program believes that providing accurate, usable information to consumers about their rights and options relating to cemetery and funeral needs is vital to consumer protection. Recently enacted legislation requires funeral establishments and cemeteries under the program’s jurisdiction to make the Consumer Guide to Funeral and Cemetery Purchases available to consumers.
The State of California is experiencing extreme diversification of the funeral and funeral related industries and would welcome further opportunity to participate in and comment on the future and manner of regulation. As a major stakeholder in this industry, this program could provide vital expertise and experience to shape this regulatory process.
GLEN V. AYERS
Enclosure: Consumer Guide to Funeral and Cemetery Purchases *
* Not available electronically.