Testifying today at a hearing on the death care industry before the Senate Special Committee on Aging, Eileen Harrington of the Federal Trade Commission's Bureau of Consumer Protection provided an overview of the Commission's law enforcement efforts to promote competition and protect consumers in the funeral industry.
The Commission promotes healthy competition in the marketplace through both its competition and consumer protection missions. The Commission's antitrust mission seeks to prohibit anticompetitive mergers or other anticompetitive business practices without interfering with the legitimate activities of businesses. "In order for consumers to have a choice of products and services at competitive prices and quality, the marketplace must be free from anticompetitive business practices," Harrington said. "For competition to thrive," Harrington noted, "curbing deception and fraud is critical."
The testimony focused on the Commission's recent program of Rule enforcement, which entails the Funeral Rule Offenders Program (FROP), a Commission-approved industry education and certification program operated by the National Funeral Directors Association (NFDA). FROP offers a non-litigation alternative for correcting "core" Funeral Rule violations - the failure to provide mandatory itemized price lists. Those funeral providers who are found through "test shopping" industry sweeps to have failed to fulfill the requirements of the Rule to provide mandatory price lists are given the choice of a conventional law enforcement action, with a civil penalty of as much as $11,000 per violation, or participation in FROP. Violators that opt for FROP make voluntary payments to the U.S. Treasury in an amount slightly less than the civil penalty the FTC would seek in a law enforcement action, and participate in NFDA-led training and competency testing. They remain in the program for five years and certify completion of the FROP requirements to the NFDA.
The testimony notes that since the implementation of the FROP-oriented sweeps program, 37 sweeps involving 1000 homes were conducted across the country and 121 homes that were found not to be in compliance have opted to enter the FROP program. "FROP has enabled the Commission to achieve better compliance with the Funeral Rule while expending fewer resources," Harrington said.
Harrington stated that the Commission is cautiously optimistic about the success of the FROP program to date and is seeking ways to improve the program as part of its overall effort to protect consumers in their dealings with the death care industry. "By implementing FROP, while continuing to maintain some traditional enforcement presence," Harrington concluded, "we can encourage greater compliance and thus achieve greater protection for consumers."
The testimony also noted that the Commission has initiated a regulatory review of the Funeral Rule that could result in a proceeding to consider amendment of the Funeral Rule. One proposal raised by some commenters during the regulatory review is to expand the Rule to cover some sellers of funeral goods or services not currently within the scope of the Rule's coverage. Harrington stated that the Commission's staff is currently examining the record of the regulatory review and preparing a recommendation on whether to initiate an amendment proceeding.
The Commission vote to approve the testimony was 5-0.
Copies of the full text of the testimony and the news release are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 1-877-FTC-HELP (877-382-4357); TDD 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.