FTC says consumers weren't getting required pre-purchase information
When consumers need to purchase funeral goods and services, they are likely to be emotional and focused on something other than employing their best consumer skills, even though the purchase could total more than $10,000. The Federal Trade Commission's Funeral Rule is designed to help by requiring that funeral homes give consumers important price and other information consistently and automatically. Yet despite extensive FTC efforts to educate the funeral industry about how to comply with the Funeral Rule and dozens of enforcement actions against alleged violators, the Commission has found that compliance is low.
Five funeral home operators in the Tampa, Florida, area are the latest to be identified in the FTC's response to this low compliance: a nationwide crackdown. The project involves enforcement "sweeps," where test shoppers are sent into funeral homes in a given area to determine whether they provide consumers with itemized price lists for goods and services, one of the rule's key disclosure requirements. Sweeps in other states have been conducted with states' Attorney General offices already; seven cases from the Nashville, Tennessee area were announced in July (three FTC and four from the Attorney General's office); and more sweeps and cases are expected to be launched soon.
In the FTC cases announced today, the government alleges that five Tampa area funeral home operators failed to give the test shoppers the required general price list. Other allegations against some or all of the defendants include failure to provide price lists for caskets and outer burial containers, failure to include prices for some items on their general price list, and failure to disclose information to help consumers decide whether they really need to purchase caskets or outer burial containers.
The companies and named corporate officers have agreed to settle the charges under consent decrees that would require them to comply with the Funeral Rule in the future and to pay varying civil penalties based on the egregiousness of the violations, the income generated by the homes, and other factors. The settlements require court approval to become binding. They are with:
- Thomas Aikens, Inc., which does business as Aikens Funeral Home in Tampa, and corporate officers Thomas Aikens and Yvonne Aikens ($9,000 civil penalty);
- Glass Funeral Home, Inc., of Tampa, and company president, James L. Glass, Sr. ($4,000);
- M.H.I. Group, Inc., of Tallahassee, which does business as C.E. Prevatt Funeral Home in Temple Terrace and St. Petersburg; Funeral Services Acquisition Group, Inc., of Tallahassee; and Douglas I. Kinzer, an officer of both companies ($35,000);
- Mark Curry's Funeral Home, Inc., of Tampa, which does business as Mark III Funeral Home; Mark III Funeral Home, Inc.; and Mark W. Curry, III ($11,000);
- Ray Williams Funeral Home, Inc., of Tampa, and company officers Jeffrey L. Rhodes, David L. Northern, Jr., and Sarah C. Northern (no civil penalty, but the settlement would permit the FTC to seek civil penalties should the defendants be found to have misrepresented their financial situation).
The FTC's Funeral Rule was promulgated in 1984 and revised in 1994. The rule requires funeral homes to give consumers who visit a funeral home a copy of a general price list that they can use to comparison shop. This list discloses that consumers do not have to purchase a casket if the deceased is to be cremated without a viewing, as well as other important information about legal rights and required purchases. The FTC's rule also makes clear that consumers do not have to buy a package deal. And it requires funeral homes to give consumers itemized lists of the goods and services they've selected, so that they can be sure to pay only for the items they've chosen or that state law requires.
In the FTC's latest industry education effort, agency staff sent a detailed guide on how to comply with the rule to more than 18,000 funeral homes, virtually every one in the country. It then embarked on the nationwide enforcement sweeps project.
The FTC's Jodie Bernstein, Director of the Bureau of Consumer Protection, says consumers planning funerals can take a number of steps to better protect themselves and their families from unnecessary and unexpected expenses by:
- having discussions about funeral plans in advance, when they can take time to compare prices and services for individual items and packages;
- calling funeral homes to ask about prices and other terms for their products and services;
- asking for the itemized statement of the goods and services they have selected (this mandatory document must disclose the specific state law that requires the purchase of any item the customer did not select);
- understanding that a casket is not required for direct cremation, where there is no viewing of the body, and that it is illegal for a funeral home to tell consumers otherwise; and
- recognizing that they can purchase a casket at some place other than the funeral home, often for a lower price, and that the rule prohibits funeral homes from refusing to handle the casket and from charging a fee for doing so.
A free FTC brochure for consumers, titled "Funerals: A Consumer Guide," provides additional information about consumers' rights and legal requirements when planning funerals. Copies are available at the address below.
The Commission vote to authorize filing of the Tampa area cases was 5-0. They were filed Jan. 12 by the Department of Justice at the FTC's request in U.S. District Court for the Middle District of Florida, in Tampa.
NOTE: These consent decrees are for settlement purposes only and do not constitute admissions by the defendants of law violations. Consent decrees have the force of law when signed by the judge.
Copies of the funeral guide for consumers and the complaints and proposed consent decrees in these cases 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 Nos./Civil Action Nos:
Aikens: 952 3070/96-74-CIV-T24E
Glass: 952 3066/96-75-CIV-T24BC
E. Prevatt: 952 3069/96-71-CIV-T23B
Mark III: 952 3067/96-72-CIV-T24A
Ray Williams: 952 3068/96-73-CIV-T21E