Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Undercover inspection of funeral homes reveals FTC Funeral Rule violations, (May 5, 2015)

By Michael Menzhuber, J.D., LL.M.

FTC undercover investigators found that 27 of the 100 funeral homes they visited in six states during 2014 failed to properly disclose pricing information, as required by the FTC’s Funeral Rule, the agency announced today. The FTC annually conducts undercover inspections to ensure that funeral homes comply with the Rule.

Key provisions of the Rule, which was issued in 1984 to give consumers important rights when making funeral arrangements, require funeral homes to provide: (1) an itemized general price list at the start of an in-person discussion of funeral arrangements; (2) a casket price list before consumers view any caskets; and (3) an outer burial container price list before consumers view grave liners or vaults. Funeral homes are also prohibited from requiring consumers to buy any item, such as a casket, as a condition of obtaining any other funeral good or service. The purpose of the itemized price requirements is to enable consumers to compare prices and buy only the goods and services they want.

To avoid the possibility of a civil penalty action by the FTC, funeral homes that are found to have committed price list disclosure violations can enter the Funeral Rule Offenders Program (FROP) training program. The FROP, run by the National Funeral Directors Association, is designed to increase compliance with the Rule; provide participants with a legal review of the price disclosure requirements; and furnish on-going training, testing, and monitoring for compliance. In place of a civil penalty, participating funeral homes make a voluntary payment to the U.S. Treasury and pay annual administrative fees to the Association.

By region, the results of the FTC’s funeral home inspections in 2014 revealed the following price disclosure violations: (1) five out of 16 funeral homes in northwest Arkansas; (2) seven out of 11 funeral homes in Bakersfield, California; (3) four out of 13 funeral homes in Annapolis, Maryland; (4) three out of 16 funeral homes in St. Louis, Missouri; (5) three out of 29 funeral homes in Westchester County, New York; and (6) five out of 15 funeral homes in Seattle, Washington. The FTC also found a number of homes with only minor compliance deficiencies and required these homes to provide evidence that the problems had been corrected.

The FTC has inspected more than 2,900 funeral homes since the FROP program began in 1996 and, of the 503 homes that were found to have violations, 486 agreed to enter the FROP program in order to avoid FTC enforcement.

News: ConsumerProtection FederalTradeCommissionNews