FTC Funeral Rule and Your Rights as a Consumer
Funeral Industry — Regulated by the States
The funeral home industry is regulated on a state-by-state basis. Rules can vary widely by state and are subject to frequent changes, making state regulations one of the greatest complexities of the funeral business. The vast majority of jurisdictions require individuals to be licensed to provide funeral-related services.
There are restrictions in some states that prevent a company from owning both funeral homes and cemeteries (i.e., combination operations). The acceptance of “combos” is a divisive issue within the funeral industry. Those in favor argue that combos promote competition, enhance services, and bring down prices, making them good for the consumer. Those against combos believe that they put the independent funeral home at a competitive disadvantage.
Sales of pre-arranged funeral services are also highly regulated by the states. Regulations address marketing practices to prevent intrusive and deceptive sales tactics. In addition, there are trusting requirements for money collected on pre-need sales to help ensure the future delivery of services and merchandise that have been paid for in advance. Generally, minimum trusting amounts are 70% to 100% of the full retail price.
An important note about the Funeral Rule. It does not apply to third-party sellers such as casket or monument companies. It also does not apply to cemeteries that do not have an on-site funeral home.
FTC Funeral Rule
Summary of your rights under The Funeral Rule:
- Buy only the funeral arrangements you want.
- Get price information over the telephone.
- Get a written, itemized price list when you visit a funeral home.
- See a written casket price list before you see the actual caskets.
- See a written outer burial container price list.
- Receive a written statement after you decide what you want and before you pay.
- Get an explanation in the written statement that describes any legal cemetery or
crematory rules that require you to buy specific funeral goods or services.
- Use an “alternative container” instead of a casket for cremation.
- Provide the funeral home with a casket or urn you buy elsewhere.
- Make funeral arrangements without embalming.
At the Federal level, funeral home operations are also subject to substantial regulations by the Federal Trade Commission (the “FTC”). The FTC’s Funeral Rule, enacted in 1984 and amended in 1994, was designed to protect consumers by requiring that they receive adequate information concerning the goods and services they may purchase from a funeral provider. Understanding The Funeral Rule can help you when you shop for funeral products since you will know your rights and understand what information you are entitled to.
You are entitled to itemized prices. Specifically, the rule requires extensive price and other affirmative disclosures to the customer at the time of sale and imposes mandatory itemization requirements for the sale of funeral products and services. These requirements are reflected in the funeral provider’s General Price List, Casket Price List, Outer Burial Container Price List, and Statement of Funeral Goods and Services Selected (i.e., the sale contract). Funeral homes must give you a written price list if you request one in person, and they must give you prices if you ask over the phone.
You must pay a basic service charge. The basic service charge is the ONLY item that you cannot decline. The Funeral Rule allows funeral providers to charge a fee for the basic services of the Funeral Director and staff that cannot be declined by the customer (a.k.a., non-declinable charges). This fee can also include charges for the recovery of the funeral provider’s overhead (i.e., the cost to maintain facilities and vehicles).
You are entitled to the facts. In addition to the required price disclosures, the Funeral Rule has provisions to prevent deceptive practices and misrepresentations and ensure you get the facts, such as:
- Your permission is required for embalming, but embalming is not required by state law. However, embalming may be required for certain funerals, such as a funeral with a viewing.
- Caskets are not required for direct cremations. You have the right to buy an unfinished wood box or alternative container for direct cremation.
- Outer burial containers are not required by state law, although they are generally required by cemeteries to prevent the grave from sinking into the ground.
- Preservative and protective qualities of certain funeral goods and services do not preserve the body indefinitely.
- Cost of “cash advance” items.
You are not required to purchase everything from the funeral home. The Funeral Rule also makes it unlawful for a Funeral Provider to furnish a funeral good or service only on the condition that the customer purchase any other funeral good or service. For example, a Funeral Home cannot offer funeral services only if the family agrees to purchase a casket from that Funeral Home. Furthermore, a funeral provider must handle a casket that you have purchased elsewhere and cannot charge a fee for doing so. The requirements of state and local laws are exceptions to this provision.
OSHA and ADA rules apply to funeral homes. Funeral homes are subject to the requirements of the federal Occupational Safety and Health Act (“OSHA”) and comparable state statutes. They are also subject to the Federal Americans with Disabilities Act and similar laws.