FTC needs to crack down on funeral homes violating federal laws when selling goods, services to bereaved consumers
About a third of the funeral homes in the Spokane, Wash., area violated federal regulations I discovered when I did a survey in the early 1980s of the funeral practices used in the homes.
How did I find this out? I interviewed consumers from 30 families who had lost a loved one for a consumer article I was writing. The interviews were agonizing. My last one was with an attorney who had lost his son.
Surviving family members described being taken advantage of in their grief.
Yesterday, I was distressed to find out that funeral homes are still violating the Funeral Rule at about the same rate as they were during the 1980s.
Investigators working undercover in nine states and the District of Columbia found significant violations of Federal Trade Commission consumer protection rules at 52 of 175 funeral homes they visited during 2009, the FTC reports.
That’s means about 30 percent of the funeral homes visited were using practices prohibited under the federal Funeral Rule.
What’s the FTC doing about this gross violation of federal laws? Not much.
Here’s what happens to funeral homes that prey on grieving consumers:
Funeral homes found to have significant violations can enter a training program designed to increase compliance with the Funeral Rule. The three-year program is known as the Funeral Rule Offenders Program, and is an alternative to a possible FTC lawsuit that could lead to a court order and civil penalties of up to $16,000 per violation.
It is run by the National Funeral Directors Association and provides participants with a legal review of the price disclosures required by the Funeral Rule, and on-going training, testing, and monitoring for compliance with the rule. In addition, funeral homes that participate in the program make a voluntary payment to the U.S. Treasury in place of a civil penalty, and pay annual administrative fees to the association.
Talk about the fox guarding the henhouse!
The FTC needs to do more to crack down on funeral directors and other funeral home employees who take advantage of consumers during one of the most vulnerable times in their lives. This voluntary, "hand-holding" program isn’t strong enough. Many funeral homes are violating the law, and if they happen to get caught, they slip into a voluntary program, make a voluntary payment into the U.S. Treasury, and then go on to rip off consumers again.
It’s not like these are mom and pop operations that don’t know the Funeral Rule.
Mitch Lipka, who writes a blog for WalletPop, points out that most funeral homes aren’t small businesses anymore. They’re parts of huge corporations.
Cremations, embalming, and other services are often done in a central facility rather than at the funeral home, which, under group ownership, is now largely a showroom and sales office, Lipka says. The largest of the chains in the death business is Service Corporation International, which runs some 1,700 funeral homes and cemeteries.
That means defrauding consumers when they arrange funerals is a consistent business practice of the corporate funeral business. Imagine the billions of dollars that these companies are fraudulently making off grieving consumers annually. And the FTC stands by, holding hands with the National Funeral Directors Association in a voluntary program.
The FTC must do a better job in protecting consumers of funeral goods and services.