August 9, 1999
Re: 16 CFR Part 453
Comments with respect to Funeral Rule Review
New York State Monument Builders Association
Dear Mr. Secretary:
The undersigned is counsel to the New York State Monument Builders Association (“NYSMBA”), and respectfully submits the following comment on behalf of NYSMBA with respect to the commission’s review of the Funeral Rule, 16 CFR 453.
The New York State Monument Builders Association is a retail trade organization representing the interests of more than 500 retail monument dealers located throughout the State of New York. The majority of these businesses are small family owned and operated entities, many of which have been in business for generations.
The members of NYSMBA are not subject to the provisions of the Funeral Rule in its present form, and even if the definitions contained within the rule are amended, much of the rule will be facially inapplicable to the retail sale of monuments and memorials. Our members rarely encounter families at the time of greatest need, since monuments are not required in any specific time frame or with any urgency. NYSMBA has been quite active in the public and legislative arenas in connection with measures which affect the death care industry in general and the monument industry in particular. We have supported and sponsored legislation in New York State which has resulted in the enactment of two significant laws during the past two legislative sessions. These laws affect the manner in which the death care industry does business in the State of New York, and are related to the protection of consumers, the ultimate goal of the Funeral Rule. Copies of these recently enacted statutes are annexed hereto and will be discussed infra.
EXPANSION OF THE COVERAGE OF THE RULE
While NYSMBA favors coverage of all three segments of the Death Care Industry by the Rule, we respectfully submit that any expansion of the Funeral Rule to include cemeteries and/or monument retailers requires more than simply amending the definition of “funeral goods” or “funeral providers”. Monuments and memorials are not items which need to be purchased, or even considered, at the time of death or burial. Unlike a funeral, which obviously must take place shortly after death, or the sale of a cemetery plot, grave, or crypt, which must be purchased prior to burial, monuments are often not erected until months, or even years, after death. Time is not a factor which need be present in the purchase of a monument or memorial, and for that reason monument retailers occupy a different niche in the death care industry than do funeral providers or cemeterians.
It is essential that the commission recognize that the death care industry has three separate and independent components, each of which has a different aspect and a different relationship with the ultimate consumer for whose benefit the Funeral Rule was established.
Traditionally, the “Death Care Industry” has been divided into its three natural segments, i.e. the funeral, the cemetery, and the memorial. There is an overlap and a symbiotic relationship among the three significant entities in the death care industry. However, any expansion of the Funeral Rule should recognize that the three segments each serve a significantly different function, albeit the same constituency at different times.
MONUMENTS ARE SIGNIFICANTLY DIFFERENT
Monuments, and monument retailers, differ significantly from funeral merchandise and funeral providers. A monument or memorial is not an item which is necessary to a funeral or the purchase of a cemetery plot. In this respect, monuments differ significantly from those funeral goods which are required, e.g. caskets, without which a funeral is impossible. Funeral providers, whose services and goods are required at the time of the funeral, occupy a unique position vis-a-vis the ultimate consumer. They are doing business, for significant profit, with a consumer who is at the most vulnerable point in their life, grieving for a lost loved one and spending significant sums of money on very short notice. Because consumers rarely have either the time or the ability to comparison shop or to reflect upon their expenditures, the Funeral Rule was initially enacted so that consumers might have as much information as possible in order to counter what were then perceived as high pressure or unfair sales tactics. Just as there was a need for the rule when it was enacted, there is a continuing need for the Funeral Rule today. In today’s climate, there is an additional factor which the commission should consider and which has a significant effect on consumers. Several large conglomerate corporations, notably Service Corporation International, and The Loewen Group, have acquired large numbers of both cemeteries and funeral homes. Their common corporate practice has been to continue operating these same funeral homes under the names, and sometimes with the personnel, by which they have been operating for many years. However, there is no disclosure of the true corporate ownership to the consumer, and typically consumers have no idea that they are dealing with a large conglomerate. In New York State, we have observed instances where the acquisition of all of the funeral providers in an area by the conglomerate has resulted, not in a reduction of prices because of consolidation of costs, but in a drastic increase in prices, to the detriment of the consumer. The attention of the commission is respectfully directed to the comment and report submitted by Jules Polenetsky, Commissioner of Consumer Affairs of the City of New York, which contains empirical data with regard to the acquisition of funeral homes in the borough of Manhattan.
The segregation of the three segments of the industry has been recognized by the legislature of the State of New York, and should be recognized by the Federal Trade Commission in any amendment to the Funeral Rule. In 1998, the state legislature passed, and Governor Pataki signed, Chapter 560 of the laws of 1998 (a copy of which is annexed hereto) which prevents combinations of cemeteries and funeral homes. Specifically, the statute prevents management contracts among these separate entities, and prevents funeral homes from operating on cemetery property or cemeteries from leasing property to funeral homes. The statute also contains a provision which codifies a previous regulation of the New York State Cemetery Board, prohibiting the sale of monuments by incorporated cemeteries within the State of New York under the jurisdiction of the New York State Division of Cemeteries. There are some 1700 such cemeteries in New York State. This recognition that there are three separate but virtually equal parts to the death care industry should be recognized by this commission as well.
THE RULE SHOULD REQUIRE A SEPARATE CONTRACT FOR MONUMENTS
In 1999, the state legislature and governor approved Chapter 318 of the laws of 1999, a bill sponsored and supported by the New York State Monument Builders Association and opposed during the legislative process only by the representatives of Service Corporation International. That statute requires (effective November 1, 1999) that monument or memorial sales be evidenced by a written contract, separate and apart from any other contract for property or services related to the burial of a human being. As a result, the cost of a monument can no longer be included in a funeral bill, thus increasing the likelihood that a consumer will afford themselves of the opportunity to comparison shop for both price and quality. The statute further requires that this separate contract for a monument be significantly detailed; it must contain in addition to the names and particulars of both parties to the contract, the full name of the memorialized individual and the date of death, a full description of the memorial including a sketch, the number of letters, the layout of the inscription, the approximate date of completion, and the name of the cemetery, as well as full price disclosure. In enacting this law, the New York State legislature recognized the following in a memorandum justifying the passage of the law:
“The purchase of a grave monument or memorial is one of the most important aspects surrounding the death of a human being. A headstone serves as the memorialization of an individual after they have passed on. They must also withstand the elements and time. Consumers all over the world care for those they have buried and want them remembered in the most dignified manner possible.
Practically, memorials represent a substantial commitment. Typically made from granite, they require a substantial commitment of time and energy on the part of those who prepare and carve them. Consumers rely on this and pay a premium for it. Memorials may cost hundreds or even thousands of dollars. Currently, consumers may purchase memorials from monument builders or dealers or from funeral directors when other burial related property or services are purchased.
The uniqueness and importance of memorials is enhanced when they are sold. At the time of sale, whether by a funeral director or monument dealer, the consumer is agreeing to make a substantial financial commitment. Most frequently, it is also an emotionally charged purchase. Usually, a family member seeks to buy a memorial at or around the time a loved one has died. This causes emotions to run high and may cause the consumer to be less in tune with the details of the transaction they are entering.
There have been cases in the past when entities selling monuments have taken advantage of the various factors weighing on a consumer’s mind at the time a loved one has died.
This legislation recognizes the gravity of death. It also recognizes the importance of providing consumers with important basic information in a clear way, especially at a time when consumers may be struggling with emotions. It does this by providing consumers with certain necessary and clear information in a separate written contract for the sale of a memorial or monument. By requiring every seller of a memorial to provide the same information in a separate contract, consumers are given a clear itemization of terms of this very important purchase. They are also protected against the unscrupulous who may seek to take advantage of them in their time of mourning.”
Because certain portions of the Rule upon which comment is sought by the Commission do not affect the monument industry, and would not even if coverage is expanded, we respectfully decline to comment further on those aspects, deferring to Commission staff and to the commentary of those affected and having knowledge.
In summary, the New York State Monument Builders Association believes that the commission should retain the Funeral Rule, and should expand the rule and amend the definitions contained therein. The rule should be expanded to encompass cemeteries and perhaps the sale of monuments and memorials, provided that the rule requires a separate contract similar to that required in the State of New York as well as a recognition that monuments or memorials are not traditional funeral goods and that memorialists and monument retailers are not funeral providers. We would go so far as to suggest, with the utmost respect, that the rule be changed from “The Funeral Rule” to the “The Death Care Industry Rule”, thus bringing into play all three entities and recognizing the significant contribution which each plays in the overall interaction of the industry.
JOHN S. WALLENSTEIN