Ftc Funeral Industry Trade Regulation Rule Synopsis

1. Funeral Industry Practices

This TRR imposes requirements with regard to four aspects of the offering for sale and sale of funeral goods and services:

• provision of price information,

• provision of information about funeral requirements,

• bundling of goods or services in a funeral package, and

• performance of certain sciences without prior approval.

1.1. Who Is Covered by the Rule. The rule requires that all "funeral providers," or their agents, give certain disclosures and refrain from certain practices in connection with the arranging of funerals. In order to qualify as a "funeral provider," two basic criteria must be met by any person, partnership or corporation:

• It must offer to sell funeral goods to the public; and

• It must offer to sell funeral services to the public, which services consist of (1) caring for and preparing human bodies for burial or other disposition, and (2) arranging, supervising or conducting the funeral or disposition.

In addition to the traditional funeral home, the rule applies to cemeteries and crematories if they meet the dual standard of selling or offering to sell funeral goods and services.

1.2. Transactions to Which the Rule Applies. The rule applies to the sale or offer to sell funeral goods and services. The TRR requirements do not apply to "Preneed" contracts entered into with consumers prior to the effective dates of the rule, but they do apply to such contracts sold after the effective date of the rule. The TRR also applies to any upgrading of funeral arrangements that are already the subject of a preneed contract.

1.3. Requirements Regarding Price Information. The FTC determined that the widespread failure of funeral providers to furnish information on the prices of specific funeral goods and services was an unfair practice. Thus, this TRR requires that three different types of price disclosure be supplied to consumers.

1.3.1. Price Disclosures Over the Telephone. Persons who inquire over the phone about the terms, conditions or prices of funeral arrangements must be told that prices are available over the phone and, if the caller inquires, price information as it appears on the funeral provider's price lists must be provided. In addition, if readily available, any other information requested about the terms, conditions or prices of funeral arrangements must be provided over the phone.

1.3.2. Price Lists. The rule provides for a general price list, a casket price list, and an outer burial container price list. The general price list must be given to the consumer for his retention at the beginning of any discussion about funeral arrangements or the purchase of goods or services. The casket and outer burial container price lists must be exhibited at the beginning of discussion about the purchase of a casket or outer burial container and, in any event, must be made available before such goods are actually shown to the customer. The latter two lists must be shown to persons who inquire in person about such products; they do not have to be shown where there is no discussion of the purchase of the goods to which they apply. Further, the casket and outer burial container price lists that are shown need not be turned over to the customer for retention.

1.3.2.1. General Price List. The general price list must contain a breakdown of prices by types of goods or services offered by the funeral provider. It must be labeled "general price list," and must contain the name of the funeral provider and the list's effective date, along with a statement that the list does not include items that the provider may buy for the customer from third parties. Retail prices must be given for fourteen types of goods and services involved in funeral arrangements. The general price list also must give a price range for caskets and outer burial containers, or attach price lists for such products, and must contain a statement explaining the general services of the funeral director and staff and how such services will be charged.

1.3.2.2. Casket Price List. The casket price list must contain identifying characteristics and retail prices for all caskets and alternative containers offered that do not require special ordering. The list must be labeled "casket price list" and contain the name and address of the funeral provider and the effective date of the list. This required information may appear in a typewritten list, a brochure, notebook, chart or other format.

1.3.2.3. Outer Burial Container Price List. The outer burial container price list is similar in every respect to the casket price list, except that it must be identified as an "outer burial container price list," and give the prices and identifying characteristics for outer burial containers if they are offered for sale by the funeral provider.

1.3.3. Statement of Funeral Goods and Services Selected. At the conclusion of a discussion that results in an order for funeral arrangements or other disposition of a body, the customer must be given a statement that he may retain that identifies all goods and services ordered and their prices, a specifically itemized list of cash advancements that will be paid for the customer by the funeral provider and their amounts, or a good faith estimate of the amounts (to be updated with a firm statement of cash advances before the final bill is paid). The statement must add up the total cost of the goods and services selected.

1.4. Misrepresentations and Preventive Requirements. The FTC declared misrepresentation in the selling of funeral arrangements to be deceptive and established certain affirmative prophylactic requirements.

1.4.1. Embalming Provisions. Deceptive practices regarding embalming are (1) representing that state or local law requires embalming, when that is not the case, and (2) failing to disclose that embalming is not required by state or local law, except in certain special cases.

As preventive requirements, a funeral provider must not represent that embalming is required in circumstances where state or local law does not require embalming, and place the following disclosure on the general price list in close proximity to the price shown for embalming:

"Except in certain special cases, embalming is not required by law. Embalming may be necessary, however, if you select certain funeral arrangements, such as a funeral with viewing. If you do not want embalming, you usually have the right to choose an arrangement which does not require you to pay for it, such as direct cremation or immediate burial."

1.4.2. Casket For Cremation Provisions. It is deceptive to represent (1) that state or local law requires a casket for direct cremations, or (2) represent that a casket, other than an unfinished wood box, is required for direct cremations.

It is a preventive requirement that the following notice be placed on the general price list in close proximity to the range of prices shown for direct cremations, if the funeral provider arranges direct cremations:

"If you want to arrange a direct cremation, you can use an unfinished wood box or an alternative container. Alternative containers can be made of materials like heavy cardboard or composition materials (with or without an outside covering), or pouches of canvas."

1.4.3. Outer Burial Container Provisions. It is deceptive to represent that state or local law or local cemeteries require the use of an outer burial container when that is not the case, and fail to disclose that state law does not require use of an outer burial container.

It is a preventive requirement that the following notice appear in close proximity to the price given for outer burial containers appearing on the outer burial container price list, or general price list if the funeral provider elects to include outer burial container prices on the general price list:

"In most areas of the country, no state or local law makes you buy a container to surround the casket in the grave. However, many cemeteries ask that you have such a container so that the grave will not sink in. Either a burial vault or a grave liner will satisfy these requirements."

1.4.4. General Provisions on Legal and Cemetery Requirements. It is deceptive to represent that state or local laws or regulations or particular cemeteries or crematories require the purchase of any funeral good or service, when such is not the case.

As a preventive requirement, any requirement of state or local law or of a cemetery or crematory requiring the purchase of any funeral good or service must be identified and briefly described on the statement of funeral goods and services selected that is given to the person arranging the funeral at the conclusion of discussions about arrangements.

1.4.5. Preservative or Protective Value Claims. It is a deceptive act to represent that any funeral good or service will delay the decomposition of human remains for a long or indefinite time or, when such is not the case, that funeral goods will protect the body from gravest substances.

1.4.6. Cash Advance Provisions. Frequently the funeral provider will make cash payments to third parties in connection with funeral arrangements, such as for newspaper insertions. It is a deceptive act for a funeral provider to represent that the amount billed for the cash advance is the same as the amount paid out, if that is not the case. Conversely, it is deceptive not to disclose the fact that the amount being charged for the cash advance is not the same as the amount paid out.

It is a preventive requirement that, if the funeral provider imposes a charge for making cash advancements, or if it receives and retains a rebate, commission, or trade or volume discount on the cash advance transaction, the following sentence must be included in the general price list at the end of the cash advances disclosure: "We charge you for our services in buying these items."

1.5. Required Purchase of Funeral Goods or Services. The FTC determined that funeral purchasers were frequently forced into buying goods or services that were not necessary, either because alternatives were not provided, or funeral arrangements were offered only in packages that did not allow the customer to pick and choose those goods and services that were actually desired.

1.5.1. Casket Purchases for Cremation. It is a deceptive act to require anything more than an unfinished wood box in connection with direct cremations.

As a preventive requirement, funeral providers who arrange direct cremations must make available an unfinished wood box or alternative container (defined in the rule) for use in direct cremations.

1.5.2. Other Required Purchases. It is an unfair or deceptive act for a funeral provider to condition the sale of any funeral good or service on the purchase of any other funeral good or service, except as may be required by law or allowed by the rule. The rule does allow the funeral provider to decline requests for goods and services that are "impossible, impractical or excessively burdensome to provide."

The following notice, with bracketed sentence to be included only if applicable, must appear immediately above the price disclosures in the general price list:

"The goods and services shown below are those we can provide to our customers. You may choose only the items you desire. [However, any funeral arrangements you select will include a charge for our services.] If legal or other requirements mean you must buy any items you did not specifically ask for, we will explain the reason in writing on the statement we provide describing the funeral goods and services you selected."

In addition, a notice must be included on the statement of goods and services selected as follows:

"Charges are only for those items that are used. If we are required by law to use any items, we will explain the reasons in writing below."

1.6. Embalming Services Provided Without Prior Approval. It is an unfair or deceptive act to provide embalming service for a fee without approval of the family or other authorized person, unless state or local law requires embalming, regardless of the family's wishes, or the funeral provider is unable to contact a family member or authorized person, after exercising due diligence to do so, and there is no reason to believe that the family would not want embalming, and subsequent approval is obtained. In seeking that approval, the funeral provider must advise that an embalming fee will be charged if a funeral arrangement is selected which requires embalming, but that no fee will be charged if a funeral arrangement is selected that does not require embalming, such as direct cremation or immediate burial.

As a preventive requirement, the following statement must appear on the final bill, contract or other written evidence of the agreement or obligation given to the customer:

"If you selected a funeral which requires embalming, such as a funeral with viewing, you may have to pay for embalming. You do not have to pay for embalming you did not approve if you selected arrangements such as a direct cremation or immediate burial. If we charged you for embalming, we will explain why below."

1.7. Record Keeping. The rule requires that the funeral provider keep and provide to the FTC on request for a period of one year after last distribution or exhibition to customers a copy of each price list required by the rule. In addition, the rule requires the funeral provider to keep for one year a copy of each statement of goods and services purchased provided to a customer pursuant to the rule.

1.8. State Exemptions. If a state has in effect rules or regulations that accomplish protections for consumers equivalent to those imposed by the rule, it may petition the Commission to suspend the application of the rule in that state. The Commission may grant such application, conditioned on the continued effective administration and enforcement of the state requirements. 16 C.F.R. Part 453.