| Comment A32
16 CFR Part 453 Federal Trade Commission In response to your solicitation of comments regarding the Funeral Rule. Deciding what to do with the non declinable fee: If you eliminate the non declinable fee for basic services of the funeral director and staff, the definitions of some of the other itemized charges will need to be changed, or the funeral director will not be able to recover overhead expenses. I predict that without redefinition of other items the result will be much higher overall charges. This will happen because the funeral director will not know which of the declinable items the purchaser will accept. Because of this uncertainty, the funeral director will spread what charges are now in the non-declinable fee over the other items. However since the funeral director does not know which items will be selected, he will spread more than 100% of the charges to the several remaining items so as to be sure the consumer pays for the overhead no matter what services the purchaser accepts. If you simply make the non-declinable fee declinable, I do not understand how a family is going to have a funeral and not use any of the basic services of the funeral director and staff. The result will be that the fee is declinable, but every family uses at least some of those services. If every family uses it, then there is no advantage to the purchaser by making it declinable. There must have been some good reasons for setting up the non-declinable fee as such when the original rule was published in 1984. Let's not throw out the baby with the bath water. Rather than looking only at the non-declinable characteristic of the fee, look at the issues for making it non-declinable in the first place. If those issues are no longer valid, then look into how to correctly address those issues rather than simply making the fee declinable and not addressing the underlying issues. Sincerely, John G. McCune, Jr. 16 CFR Part 453 Federal Trade Commission In response to your solicitation of comments regarding the Funeral Rule. In response to: (5) Does the Rule overlap or conflict with other federal, state, or local laws or regulations? If you put on the General Price List Private Viewing of unembalmed remains, what are the implications of the Americans with Disabilities Act as regards the viewing room? What OSHA regulations come into play? What personal protective equipment must the attendees wear? Who must provide it? Who must pay for it? Sincerely, John G. McCune, Jr. 16 CFR Part 453 Federal Trade Commission In response to your solicitation of comments regarding the Funeral Rule. In response to: (5) Does the Rule overlap or conflict with other federal, state, or local laws or regulations? In Alabama up until 1978 we had Burial Insurance. That is Life Insurance that pays off in burial merchandise and services. In 1978 a class action law suit (Battle vs Liberty National) terminated the issuance of such policies. Some 70% of the people we bury today have these policies. The courts have (twice - once in 1978 and once in 1999) decided exactly what services these policies cover. The definition of services covered is not couched in terms of Funeral Rule itemized items. Thus to comply with the Funeral Rule as written, the funeral director should charge the non-declinable service fee for each service. If he makes that charge he gets sued . See Carrol Williams and Annie Merle Williams vs Service Corporation International Civil action 95-3822 in the Circuit Court of Mobile County, Alabama. Se also the sister suit Mary Sue Thrash and James E. Thrash vs SCI Alabama Funeral Services, Inc. Civil Action 96-87 in the Circuit Court of Mobile County, Alabama. The result is that for any interpretation that could benefit the consumer at the expense of the funeral director, the Burial Insurance policy is a preneed sale made by an insurance company and binding on a funeral director in accordance with laws in effect prior to the 1984 funeral rule. However for anything that benefits the funeral director the insurance policy is a current sale thus subject to the current and ever changing law. Thus the funeral director and the consumer are not on equal footing in the eyes of the State, Federal law. Sincerely, John G. McCune, Jr. 16 CFR Part 453 Federal Trade Commission The casket stores are unhappy because the manufacturers will not sell to them. This is not an FTC issue but rather an anti-trust issue. The issue is between the casket stores and the manufacturers, not the funeral directors. Thus unless and until the casket stores come under the funeral rule, the FTC has no place in this issue. The casket stores find it unacceptable to the purchaser that the funeral director marks up caskets as much as he does. If the funeral director wants to put the casket store out of business, all he has to do is sell caskets slightly above cost. If he sells caskets near cost he will raise his services prices. Most funeral homes have a higher absolute margin on the more expensive caskets than the less expensive ones. The result will be that those who can afford more expensive caskets will get them at a lower (than now) total funeral bill price. Those unable to afford the highest cost caskets will have a higher (than now) total funeral bill because the higher service charges will more than offset the lower casket price. The consumer is the loser here. In the current politically correct Robin Hood mentality of let the wealthy pay more and create set asides for the poor, the result of creating a situation in which the markup is taken out of caskets will be exactly what is least desirable. The funeral director may be the intended victim, but he won't be. The consumer (especially the poor one) will be the victim. The casket stores insist on the ban on casket handling fees to ensure competition with the funeral directors. The funeral directors are unhappy because they are on unequal footing with the cemeteries when trying to sell vaults and markers. When the funeral director sells the vault or marker, cemeteries charge set up and inspection fees to recover lost profits from lost sales. The cemeteries do not charge these fees when they make the vault or marker sale. Thus the purchaser has the choice of where to buy the vault or marker, but if he does not buy it from the cemetery, he pays the inspection or setup fee. This fee is conceptually no different than the casket handling fee the funeral director is prohibited from charging. The cemetery has done the same thing as the funeral director who sets up a package of services which are sold at a discount when a casket is also purchased. In effect he has stepped around the casket handling fee. The consumer is the loser here. Casket stores would suggest the elimination of package pricing (at a discount) by funeral homes. The result of which will be higher prices for the consumer because the funeral director will not know who is and who in not going to buy a casket from him, so he will assume less revenue from casket sales and set service prices accordingly. The consumer is the loser here. Most especially the consumer who buys from the casket store. Should the FTC decide to eliminate package pricing at a discount (i.e. side stepping the casket handling fee) and simultaneously not bring cemeteries within the scope of the Funeral Rule and eliminate inspection and setup fees by cemeteries, the result will be one of two things (neither of which benefits the consumer). The short term outcome will be higher service charges by the funeral homes to make up for lost revenue from lost casket sales and lost vault and marker sales. The long term outcome will be smaller funeral homes going out of business and more independent funeral homes selling to large corporate companies. The large corporations already own a large portion of the big cemeteries. Thus they don't care if the purchaser buys their marker and vault from their funeral home or their cemetery. We have seen the price increases when the large corporations buy the independent funeral homes. When the large corporations own enough of the funeral homes, they will then set up holding companies to either purchase the casket manufacturers and starve out casket stores, or they will simply buy up the parent corporations of the casket stores and close them. The consumer is the loser here. As I see it you have apples and oranges: Casket Stores, Cemeteries, and Funeral Homes. Good old fashioned American Ingenuity has shown that once the government makes a rule trying to set up a level playing field for unequal players, the players soon find out a way to game the system. History shows us the government has not been successful in leveling playing fields. The government has consistently tried to create an advantage for one group while at the same time (usually unintentionally) creating a disadvantage for another group. All of this is done in the name of some politically correct agenda. The government is quick to create the advantage but ever so slow to correct or remove the (unanticipated and usually unintentional) disadvantage. I suggest the best thing for the consumer would be for the FTC to either bring everybody under the Funeral Rule or leave everything alone. Sincerely, John G. McCune, Jr. |