The Federal Trade Commission today announced its support for two new programs to boost compliance with the FTC's Funeral Rule which, among other things, requires funeral homes to give consumers a list of prices for the merchandise and services they offer. The programs were developed by the National Funeral Directors Association and will be implemented jointly by the NFDA and the FTC in a concerted effort to ensure that consumers have the information they need to make these important and costly purchasing decisions.
"Through these programs, the funeral industry will be working together with the FTC in a committed way to resolve low compliance with the rule's price disclosure requirements -- the need for better training for funeral home employees," said FTC Bureau of Consumer Protection Director Jodie Bernstein. "Coupled with continued vigorous enforcement of the rule, these positive and innovative compliance and training programs will greatly boost consumers' access to price and other information about the funeral products and services available to them, and conserve FTC enforcement resources for the most egregious rule violators."
1. Funeral Rule Offenders Program
The FTC said it will continue an approach to Funeral Rule enforcement that it began last year, whereby it coordinates with state and local law enforcers to undertake city-wide "sweeps." In such a sweep, the law enforcers send test "shoppers" into funeral homes to determine whether the homes provide copies of the general price list required by the rule. Following such a sweep, at the FTC staff's discretion, funeral homes that failed to give test shoppers the general price list may have the option to enter the Funeral Rule Offenders Program. Under the program, the funeral home will make a voluntary payment to the U.S. Treasury that is lower than the civil penalty the FTC can obtain for rule violations (civil penalties can range up to $10,000 per violation). NFDA attorneys then will review the home's practices, revise them so that they are in compliance with the FTC rule, and then conduct on-site training and competency testing for all licensed employees. Every year thereafter for five years, the employees will be given additional training and testing. Participation in the program does not shield a home from additional FTC law-enforcement action, if warranted.
The program will boost industry compliance dramatically and minimize taxpayer costs associated with enforcing a rule in an industry made up of thousands of players, many of which are small, family-owned businesses, the FTC said. Funeral homes participating in the program will benefit from reduced legal fees, reduced and tax-deductible payments to the Treasury, and free training.
"The general price list is key to the underlying goals of the FTC's Funeral Rule," Bernstein said. "It signals to consumers right up front that it's okay to talk about prices, and it makes quite clear that consumers only have to buy the products and services they want or that are required by law or the cemetery they've chosen."
2. Funeral Industry Rule Compliance Assurance Program
This new voluntary NFDA certification program involves comprehensive training for all employees in a participating funeral home. Each participant will adopt a written policy for compliance with the price list distribution requirements of the rule, and will receive an emblem telling consumers that the home is a program participant and has voluntarily agreed to comply with all requirements of the Funeral Rule. Again, participants would not be immune from test shopping or investigation by FTC or state or local law enforcement authorities.
Both programs would be open to all funeral homes in the country, regardless of whether they are members in the NFDA.
When planning funerals, the FTC's Bernstein also offers this advice to help consumers planning funerals to get what they want and pay only for what they need:
- consumers should ask for price information over the telephone or when they visit a home and, where possible, plan ahead so that they are not making expensive purchasing decisions at a difficult emotional time;
- consumers who choose to purchase a casket at someplace other than the funeral home cannot be charged a casket- handling fee by the home;
- once consumers have selected a funeral service, they should check the itemized statement the funeral home gives them to be sure it lists everything they've chosen, properly priced, and also that it states the specific state law that requires the purchase of any particular item;
- funeral homes cannot state that embalming is required by law unless that is the case, and homes must disclose in writing to consumers their right to choose what is to be done with remains not embalmed.
The Commission vote to approve the programs was 4-1, with Commissioner Mary L. Azcuenaga issuing a dissenting statement in which she said that "[a]lthough the payment [to the Treasury included in the program] is described as "voluntary," . . . it is, for all intents and purposes, a payment compelled by this agency." Observing that "[t]he Commission's ability to obtain monetary relief, including civil penalties, is narrowly circumscribed by statute," and that the payment provided for in the new program was not being compelled pursuant to the statutory procedures, she found the payment without legal basis. She said, "I cannot endorse a program that would cede to the staff one of the Commission's most fundamental responsibilities, that of deciding who has violated its trade regulation rules and who should be subjected to penalties. The new program is a misuse, if not abuse, of the power of this institution."
Copies of the FTC's Funeral Rule, Commissioner Azcuenaga's full statement, and a free consumer brochure, "Funerals: A Consumer Guide," outlining the rule and consumers' rights under it are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov
(FTC File No. P854213)