PHOENIX— Arizona’s Attorney General Office has joined a coalition of attorneys general calling on the Federal Trade Commission to protect consumers in need of funeral home services.
Joining Arizona in effort are the attorneys general from California, Colorado, Connecticut, Delaware, Hawaii, Iowa, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Virginia, and Wisconsin and the District of Columbia,
The Funeral Rule, enacted in 1982, protects consumers from unfair and deceptive practices in the sale of funeral products and services. Funeral expenses have risen almost twice as fast as consumer prices, according to the U.S. Bureau of Labor Statistics.
In a letter sent to the Federal Trade Commission (FTC) about its proposed Funeral Industry Practices Rule, the 23 Attorneys General warn that insufficient pricing transparency in the industry prevents consumers from accurate comparison shopping and exposes them to being overcharged. The coalition is urging the FTC to require funeral service providers to standardize pricing disclosures and safeguard against the misuse of funds consumers pay in advance of a funeral.
As deaths from COVID-19 rise and many funeral arrangements cannot be conducted in person, Arizona Attorney General Mark Brnovich and the other attorneys general are asking the FTC to better shield bereaved families nationwide from unknowingly overpaying for funeral services.
“Most of us don’t have experience in planning a funeral, but losing someone we love can be one of the most difficult times in a person’s life, and it shouldn’t be made any harder by incomplete information or inconsistent pricing,” said Brnovich.
Brnovich is urging the FTC to “adopt new rules to further protect grieving consumers against fraudulent or overbearing demands made by the funeral industry and increase transparency for people who are in need of funeral goods and services.”
The FTC is reviewing the relevance and effectiveness of its 1982 Funeral Industry Practices Rule, which regulates funeral homes. According to the Arizona’s Attorney General’s Office (AGO), the current iteration requires providers to give up-front itemized price information along with explanations for those prices, though there is no standardized format providers must follow to offer easy price comparisons for consumers. The current rule also allows consumers to use caskets purchased elsewhere at no added expense, gives consumers the right to opt-out of goods and services they do not want or need, and offers some protections from misrepresentations around services such as embalming. However, the Rule has not been updated since 1994, and it does not require providers to post this information online or offer consumers context around average funeral costs. It also leaves consumers vulnerable to overpayment or fraud if they pay for services in advance, such as through a life insurance policy.
In their letter, the state Attorneys General urge the FTC to strengthen protections for consumers by requiring funeral providers to:
- Publicize itemized price lists online: Prices on goods and services can vary widely between funeral homes in an area. Requiring providers to post their prices online would enable consumers to easily comparison shop and make informed decisions about the costs of the funeral services they are purchasing.
- Disclose the average cost of funeral services on its online price list: When a family opts to pay for funeral services using a life insurance plan, funeral homes or third parties will advance funds in exchange for the assignment of the policy. This arrangement may tempt funeral service providers to create inflated or fictitious charges in order to recover more funds from the policy. Requiring providers to inform consumers of the average costs of their services would give consumers a clearer sense of how much money they should expect to allot from a life insurance plan.
- Provide consumers electronic copies of price lists before they select services: Funeral service providers should be required to provide consumers an electronic price list following an initial solicitation of the provider’s services. This would provide documentation to consumers about the costs, and would also allow them to consider whether they want to pay for cash-advance items—such as clergy, crematory and burial services, or flowers, themselves, rather than through the home.
- Standardize the format for price lists and other disclosures: A standardized format for price lists, along with standardized disclosure requirements around funeral services such as viewings and visitations, would ensure transparency and clarity for consumers. It would also inhibit funeral homes from charging unlawful or unreasonable fees. At the same time, standard forms would make it easier for funeral homes to assess whether they are complying with regulatory requirements.
- Provide receipts for services paid to third parties and repay any funds in excess of final costs: To ensure that funeral service providers do not pad the charges for payments to third parties, a few common-sense requirements are necessary. First, funeral homes should be required to provide receipts for any such payments within one week of the funeral. Second, if the consumer has paid an amount for a third party’s services that exceed the final bill, funeral homes should be required to refund consumers within one week of providing the receipts.
- Protect pre-need funeral payments: The Attorneys General recommend that funeral providers keep any pre-need payments in separate escrow accounts and provide annual bank statements to consumers showing the amounts in these escrow accounts.
- Disclose embalming requirements: In some jurisdictions, funeral homes may insist on embalming even when it is not required by local law. In Arizona, embalming is not required if remains are refrigerated, cremated, or buried within 24 hours. More information. The Attorneys General note that stronger disclosures around these requirements are necessary to enable consumers to make a choice about this service. They also urge the FTC to mandate disclosure from any funeral home that requires embalming in its services even if the law does not.
A copy of the letter.