FTC and Funeral Homes

The Federal Trade Commission and funeral homes have a relationship that has proven productive and healthy over the years for families suffering from grief over the loss of a loved one. Thanks to rules put in place by the FTC and obeyed (largely voluntarily) by personnel at funeral homes, consumers can have great confidence these days that, when they are dealing with a funeral home, they are not being unduly duped into paying much more than necessary for a memorial service and all its amenities.

This was not always the case, however, and it literally took an act of Congress to set things in order in 1984 with a landmark piece of legislation called The Funeral Rule. That rule empowered the FTC to enforce a set of rules intended to curb some routine practices of Funeral Homes. Many of these practices had been featured in a classic 1963 book, The American Way of Death, by journalist Jessica Mittford. Since that books publication and since The Funeral Rule was adopted, things have changed considerably for families stepping into a funeral home for the first time after the death of a loved one. At first glance, it may seem that the changes are relatively small – especially when one considers that the elements of a traditional funeral have not changed in any elaborate way since 1984. But, in fact, the typical funeral home today is much different than it was in the mid-to-late 20th century.

The Federal Trade Commission has made shopping for memorial products easier for the consumer

While The Funeral Rule can be attributed for much of the changes (improvements, really), the real credit belongs to funeral homes themselves for being open to making the changes voluntarily. Even Congress and the FTC admit that the government has very limited resources for the enforcement of the funeral rule and, therefore, is dependent upon funeral homes to voluntarily comply with the regulations. Fortunately, that has happened to a large degree in the decades since the Funeral Rules has been in place. Voluntary compliance with the rule has been so great, in fact, that the entire culture of the funeral home industry is now dramatically different than it was when Jessica Mittford’s book first appeared. Mittford did publish an updated version of the book just before her death in 1996, and in that second book she noted that the industry still had substantial room for improvement. But the fact that Mittford’s own funeral cost less than $1,000 is testimony to the scale of improvements that she did bring about with her earlier work.

Here is a brief summary of how the FTC rules, aimed at helping funeral consumers to save money while getting high quality services, apply and are routinely practiced in today’s funeral homes.

The most important business practice that has come about in funeral homes as a result of the FTC and the Funeral Rule has been the introduction of the “General Price List.” This is a document that, by law, must be presented by funeral home personnel to ever person who inquires about the funeral home’s services. The FTC requires funeral homes to also make the information on this sheet available to costumers who request it via telephone and the internet. While there is no law that requires funeral homes to establish email systems (or other means of communicating with customer via the internet), the FTC does require that, if a funeral home does have such electronic communication system, they respond affirmatively to all requests for the General Price List information.

In general, the funeral home’s General Price List must be labeled as such and it must include accurate prices for all services (and goods) that the funeral home regularly provides for customers. Unlike in other industry’s (such as hotels and airlines), funeral homes are required by law to be very uniform in their pricing. Where as customers of other industries often realize that the published prices are, more or less, a starting point for negotiating a much lower rate, the prices listed on a funeral home’s General Price List must, by FTC law, be charged equally for all customers. (Some exceptions can be made when a funeral home’s management wants to donate services or sell them at a very reduced rate to customers with limited resources, however.) The intent of this rule is to help grieving customers avoid having to “fight” for the best possible funeral service rates while also dealing with the loss of a loved one. Funeral home personnel as well as customers across America have come to appreciate and respect this rule because it eliminates the need for either party in the transaction to resort to the type of uncomfortable negotiating tricks that are common on, say, a car dealer’s lot. Before the FTC began enforcing these new rules for funeral homes, it quite common for a funeral director to take on the role (and often earn the accompanying disdain) of a used car salesman. In passing the funeral rule, Congress showed that it understood that, when suffering from grief and stress caused by the death of a loved one, even the most savy of consumers can find themselves vulnerable to intimidating sales tactics that leave them agreeing to spend much more than they intend or even can afford to spend on their loved one’s funeral. Having locked-in-stone prices listed, from the very beginning, helps consumers to make the buying decisions that make most sense for their situation, and it helps funeral homes to assure that their establishment is always operating with the utmost of ethics, integrity and good faith. Given the nature of their business, funeral home managers have come to understand that there is little room in their operation for the same sort of sales tactics that are common in other industries, so that’s why funeral homes have overwhelmingly adopted the practice of a General Price List without any complaint.

The FTC Funeral Rule has made several much needed changes in the memorial industry

Another key element of the Funeral Rule is the FTC’s requirement that funeral homes allow “outside vendors” to supply some of the accessories used in funerals that they arrange. In the days before the funeral rule was established, for example, it was common for funeral homes to politely refuse their customer’s requests to use, caskets, cremation urns, headstones, flowers, and other such funeral necessities that were not purchased directly from the funeral home. A policy of this sort, helped a funeral home to keep its prices for such materials artificially inflated, however, and it was the same sort of policy that congress and federal courts deemed illegal in about the 1950’s under anti-trust laws. (Movie theater owners were among the first in America to see these laws apply to them when courts ruled that they had to screen movies that they did not, themselves, produce.) An anti-trust mind-set is now fully immersed into America culture (hence, consumers are used to always seeing brand named merchandised stacked right along side the store-owned labels at their local grocery store), and it applies to all industries currently operating in the country. But it’s interesting to note that the funeral industry is the only one that has seen the government adopt an anti-trust policy, specifically, for it. This is further evidence that lawmakers and regulators understand and appreciate the degree to which the nature of the funeral home’s grieving customers makes them vulnerable to tactics they might otherwise reject. It is also, of course, important to point out that this portion of the FTC’s rule for Funeral Homes has given rise to a relatively small-but-important side-industry: internet memorial retailers who are able to sell caskets, cremation urns and other memorial products at often a fraction of what funeral homes will ask for identical merchandise. This has helped keep overall prices for funerals in check for consumers since the Funeral Rule was established.

From time to time, media reports surface of one or two rouge funeral home owners who are caught attempting defraud their customers by neglecting terms of The Funeral Rule. These reports are almost always met with contempt from others in the industry who are angered when their colleagues choose to do wrong by their clients. While the industry cannot be said to be entirely perfect, funeral homes do, by-in-large, a good job of abiding by both the letter and the spirit of the Funeral Rule, even knowing that enforcement resources are very limited. So, while consumers who find themselves working with a funeral director to plan the memorial ceremony of a loved one still need to exercise plenty of caution to avoid paying more than they should, it’s comforting to know that the person they are working with mostly likely has a very strong sense of ethics, integrity and compassion.