The Funeral Rule Examined
What is the Funeral Rules - Who Does it Apply to - Funeral Home & Cemetery?
If you are hearing about The Funeral Rule for the first time (or if you've only heard of it before in vague terms), you are not alone. Even many who work in the Funeral Home Industry are not fully familiar with the rule and (probably unknowingly) violate its terms. The Federal Trade Commission, the agency charged with enforcing the rule, periodically runs “mystery shopper” compliance tests on the rule and uncovers a surprisingly large number of violations by funeral home employees. Usually, the FTC investigators determine that the violations are simply the result of ignorance on behalf of funeral home employees and managers rather than any real malice or intent to disregard the law. Nevertheless, since The Funeral Rule is a serious attempt by the United States Government to curb unfair trade practices in the industry, violations are taken seriously, but a measure of leniency is built into the enforcement programs. First offenders, in lieu of substantial fines, are required to undergo a through training in The Funeral Rule Offenders Program. This program offers in depth instruction in all aspects of the Funeral Rule and its required General Price List. Though, industry critics are quick to point out that the program, while overseen by the FTC, is actually run by the National Funeral Directors Association, thereby – since it employees funeral directors, as opposed to government regulators, to teach other funeral directors – bringing its credibility and reliability into question, according to some industry observers. To help clear up the industry's internal conflict over this, then, it seems important that funeral home consumers be almost as thoroughly informed about the funeral home as those who work in the industry. This will help consumers police the industry effectively themselves. Informed consumers can help the FTC hold Funeral Rule violators accountable by, among other things, alerting the FTC when they notice funeral homes engaged in practices that are not in keeping with the Funeral Rule. (Knowing what to look for in regard to the Funeral Rule is also, of course, a great way for consumers to know whether their family is being best served by the funeral home it chooses.) It is for this reason that we have compiled the following thorough examination – aimed at consumers, particularly those who are thoroughly unfamiliar with, and possibly even intimidated by, the funeral home industry and the inner workings of their local funeral home – of The Funeral Rule and all its requirements.
What is the Funeral Rule, anyway?
The Funeral Rules was passed by the U.S. Congress in 1984 after more than 15 years of debate. It gives the Federal Trade Commission special authority over the nation's funeral homes. Most importantly it requires all funeral homes to publish, and abide by, a General Price List. This list must be offered to all families who inquire about the funeral homes services, and the FTC requires that very specific pieces of information be included. (Important note: customers do not have to ask, specifically, for the price list. Funeral homes, instead, are required to offer it, even without being solicited, very early in the first meeting with customer.) In a nutshell, the Funeral Rule is the means by which consumers and the U.S. Government can keep in check the funeral home industry's historic tendency toward monopolistic practices that work against the best interested of the families it serves. This tendency began, more or less quietly in the early 20th century and blossomed into a full-blown tradition by the middle of the century. Then it was uncovered, and become a hot political item, in 1968 with the publication of Jessica Mittford's ground breaking journalistic book The American Way of Death. That book spawned much political debate on the topic, and all the discussion eventually led to the passing of the Funeral Rule in 1984 and an updating of the legislation in 1994. Consumer advocates, and many consumers themselves, cite the rule as useful in many ways, and the death care industry's evolution in era of The Funeral Rule seems to support those claims.
Why it the Funeral Rule useful
Novices in the world of death care – in particular, families of deceased loved ones who have little to no experience planning memorial services and burials and find themselves dependent upon their local funeral home for trusted guidance – often assume that funerals are expected, and maybe even required, to follow certain time-honored traditions: formal, stoic ceremonies set amid luxurious, Victorian-era décor with the well-dressed and carefully composed deceased displayed in an elegant casket before a hushed and respectful gathering of mourners. And this assumption can lead to problems as families struggle with arranging the memorial services of their loved ones. They may assume that the large price-tag that comes with this type of perceived “tradition” may be a requirement, right along with the tradition. And that can lead to sticker shock which, in a funeral industry often intent on equating emotions with dollars, tends to come some time well after the funeral has been carried out, when support systems of family and friends have packed up and returned their routine lives – and the bill from the funeral home arrives.
The Funeral Rule is useful for helping novices avoid this shock.
It is also useful for novices who are not necessarily attracted to the “traditional” idea of a funeral and feel inclined to choose one of the many (and always growing) alternatives. Some will even argue that the Funeral Rule has helped to create the alternatives, by all but requiring that funeral homes acknowledge the alternatives and definitely opening their services to them.
Observers of the death care industry will argue that, while the Funeral Rule has not brought thorough, whole sale change to the industry, it has, overall, proven to be a useful for assuring that a healthy, competitive balance exists in the world of funeral homes memorial ceremonies. And that has helped to keep prices (at least somewhat) in check, and it has helped to unleash an entire cottage industry of alternatives to the “traditional” funeral: natural burial, creative cremation disposition, and even home funerals. It seems doubtful, many experts opine that these relatively new offerings of the death care industry would have ever come to fruition if it were not for the Funeral Rule helping to burst the monopolistic tendencies of the “traditional” funeral home business and to allow for the free-spirited exercise of competition.
How The Funeral Rule Came to Be
Deceptive trade practices and monopolistic policies (also known as “restraint of trade”) are the purview of anti-trust and other regulatory legislation enforced by the Federal Trade Commission. And, generally speaking, the laws in these realms apply to all industries, and its rare that the FTC will be tasked with policing specific rules of a single industry, such it has been asked to do with The Funeral Rule. Enforcing broad, universal rules is the general scope of the FTC's involvement.
But, by the 1970's – thanks to some popular, top-selling books such as American Way of Death and Ruth Mulvey Harmer's The High Cost of Dying – the funeral industry had earned a reputation for unnecessary opulence and attracted large doses of fire from activists bent on empowering consumers to demand corporate change. This led the FTC itself to change from what legendary activist Ralph Nader calls (in American Way of Death) a “quiescent bureaucracy largely populated by hack lawyers from second rate school, and cronies recommended by politicians, mostly Southern” to an agency reminiscent of “the New Dealers of the 1930's,” (according to Mittford's quote from one of the transformers who came to the agency in the early 1970's). “Beginning around 1970, and over the next four years or so, FTC began hiring lots of new lawyers, activists from top law schools I the country,” Angel said. “I was hired in 1972 as part of that effort.”
With its new outlook, the FTC “tried to identify especially vulnerable groups, which included the poor, the bereaved, the handicapped, the elderly,” Mittford says in her book. “The next step was to devise projects responsive to the abuses that affected them. 'One item on the list was the word 'funerals'' Angel told me. 'We then read your book, Ruth Mulvey Harmer's The High Cost of Dying, trade journals, and the like.” Out of this emerged a pilot survey of funeral prices in the District of Columbia, which led eventually to the trade-regulation rule.”
The Funeral Rule's gestation period was more than a decade, as it did not become law until 1984, and many writers have documented the spirited debate that took place in Congress and beyond as it developed. Generally speaking, industry groups such as the National Funeral Directors Association pushed for the status quo and argued incessantly that government interference in a stable, well-respected, useful industry would not be an appropriate solution to concerns brought forth by “activist lawyers” in the FTC (and elsewhere).
Nevertheless, the activists arguments prevailed – though not as much as they might have wished – and the law was born, albeit a heavily compromised version. Since its inception, consumer groups have, time and again, pointed out that the law does not go as far as they'd like in keeping a strong check on the death care industry, and they continue to push for and even stronger Funeral Rule. Of particular note – and frustration, consumer activists will say – is the awkwardness and confusion that results from cemeteries, crematories, casket dealers, and other parts of the death care industry being entirely unmentioned in the Funeral Rule. Only Funeral Homes are covered by the FTC's special law. This is not to say, of course, that other parts of the death care industry are exempt from other laws enforced by the FTC (such as anti-corruption and anti-monopoly laws), and many observers note that the Funeral Rule does apply, in a sense, to cemeteries and crematories owned by Funeral Home companies.
The activists succeeded in adding a few, relatively minor new regulations to the Funeral Rule when it was updated in 1994, but, since then, there has been no significant move for further adjustments. Consumer groups continue their push for more, nevertheless. A 2014 book (Final Rights: Reclaiming the American Way of Death) by Funeral Consumer Alliance executive director Josh Slucum, probably the nation's most prolific death care consumer advocate, outlines several requests he and others made of the Congress when further changes to the Funeral Rule were briefly considered in 1999. Chief among the requests were requirements that the rule be expanded to specifically cover all facets of the death care industry, that several pieces of consumer information (such as the mark-up funeral homes charge for arranging services such as newspaper obituaries and death certificates) be added to the General Price List, and funerals homes “standardize the description of the immediate burial option, so that consumers can compare prices charged by different funeral establishments. The recommendations were not ultimately adopted as part of the Funeral Rules, which, as we have said, has remained unchanged since 1994. Given the current political mood in the United States, many experts say, the public should not expect, realistically speaking any further changes to the Funeral Rule in the foreseeable future.
Details of The Funeral Rule
The core of The Funeral Rule is the General Price List, which funeral home employees are required to give, immediately, to anyone who inquiries about the company's services. This, aside from being the meat of the law, is also the area in which funeral homes are most often found to be in violation. (A 2015 undercover operation by the FTC, for example, found 10 of 15 Detroit area funeral homes did not properly offer GPLs, nine of 14 homes in New Mexico were similarly cited, and two of 17 homes in suburban Washington D.C.) In general, funeral homes are expected under the Funeral Rule to be very open and proactive in regard to their GPLs. “If someone asks you about the goods and services that you sell, you must give that person a General Price List,” the FTC says in an online document aimed at teaching funeral homes about their obligations under the Funeral Rule. “If you are uncertain whether the Rule applies in a particular situation, it would be sensible to provide the list.”
The FTC, realizing that many funeral homes have a vested interest in downplaying or dismissing the GPL – all while being sure to follow the letter of the law by making the document “available,” is careful to add this interesting tidbit in its guide to funeral homes:
“A verbal offer of a GPL is not enough to comply with the Rule. You cannot merely tell consumers that a GPL is available for inspection. You also cannot show them a GPL in a booklet or binder where it appears that there is only one copy available or that the booklet is solely for the funeral director's use. You must physically offer consumers a General Price List that they can keep and take home with them. If the consumer does not want to accept or look at the General Price List, you do not have to do anything else. However, you should do nothing to discourage customers from looking at the GPL, such as telling them that it is unnecessary or difficult to understand.”
The price list can vary in size from more than 40 pages to less than five. Many Funeral Homes that have longer price lists use the document as a public relations and sales tool, but this is a practice the Funeral Consumer Alliance, speaking on behalf of its mostly-activist membership, discourages.
“You want your GPL to be clear and concise, but most GPLs are riddled with insider language that confuses the average consumer,” the FCA said. “Your goal should be a price list that anyone off the street — with no previous experience buying a funeral — will understand without asking for a translation. You should also avoid euphemisms. People know that bodies are bodies; calling them "the remains" sounds stilted and affected and only serves to reinforce the negative stereotype that funeral directors are 'creepy.'”
What's required in the General Price List (GPL)
The FCT allows room for funeral homes to creatively customize their General Price Lists, but it also has a number of requirements to which it holds funeral homes accountable. Below are some of the requirements of any funeral home's GPL.
The Required Disclosures:
Funeral Homes are required to print, and abide by, some required text related to the following death issues:
Customer's Right to Select Only Services Needed or Desired: “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 basic services and overhead. 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.”
- Notes on this item: Because the issue of “basic services fees” charged by funeral homes has historically been a matter of confusion for funeral home consumers, the FTC requires that the third sentence of that required text be printed in bold. Further, the FTC allows funeral homes to include the phrase “and overhead” after “services” only if the funeral home's basic services fee does indeed, include an itemized amount for recovery of overhead expenses. This rule is in response to the historic practice of funeral homes to be vague about overhead expenses, thereby unfairly charging customers much more than is truly justified to cover the establishment's true overhead costs.
Embalming: “[Except in certain special cases,] [E]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 that does not require you to pay for it, such as direct cremation or immediate burial.
- Notes on this item: The introductory phrase “Except in certain special cases” must be deleted if the funeral home's state or local governments do not, indeed, require embalming in any cases. Consumers are advised that states and localities are split on this matter, with some allowing for exceptions in which embalming may be required and some not. If the funeral home leaves the introductory phrase in this section of the GPL, it may then explain the exceptions immediately this required text. If such an explanation does not appear, consumers are advised to consult their local and state laws before proceeding with any embalming plans. The main purpose for this required statement in the GPL is to discourage the historic funeral home practice of suggesting or hinting that embalming is required. The FTC, instead, is encouraging funeral homes to communicate to their customers that embalming, while often desired by families as part of a memorial service, is rarely a legal requirement and, in many areas, it has long been entirely optional in all cases, legally speaking.
Alternative containers for direct cremation: “If you want to arrange a direct cremation, you can use an alternative container. Alternative containers encase the body and can be made of materials like fiberboard or composition materials (with or without an outside covering). The containers we provide are (specify containers).”
- Notes on this item: The FTC requires that this text appear in “immediate conjunction” to the funeral homes' price(s) for direct cremation. (If the funeral home does not offer direct cremation services, of course, this text is not required in the GPL). The end of the last sentence (in place of “specify containers”) must, of course include an accurate description of the containers included in the price of a direct cremation. The FTC requires this disclosure to discourage the historic funeral home practice of upselling customers to alternative containers that, practically speaking, offer no significant in the cremation process. While it is true that some sort of container is usually required by law in all cremations, the type of container is largely immaterial to the cremation process itself, so long as it is easily combustible. The FTC's goal in this case is to assure that families who do purchase an alternative cremation container are making that decision based on their own emotional desires and not on sales pressure borne upon them by their funeral director or other funeral home employee.
Basic Services Fee (Option 1): “This fee for our basic services and overhead will be added to the total cost of the funeral arrangements you select. (This fee is already included in our charges for direct cremations, immediate burials, and forwarding or receiving remains.)
- Notes on this item: This statement is required to appear on the same page the actually basic service fee is listed. The basic service fee, in this case, must be the “non-delineable” charge for overhead and basic services that have not been allocated in other prices. The FTC's goal with this disclosure is to discourage the historic funeral home practice of including “basic services and overhead” expenses in the price of multiple products and services.
Basic Services Fee (Option 2): “Please note that a fee of (specify dollar amount) for the use of our basic services and overhead is included in the price of our caskets. This same fee shall be added to the total cost of your funeral arrangements if you provide the casket. Our services include (specify).”
- Notes on this item: The FTC's goal with this disclosure, as in the option listed above, is to discourage the historic funeral home practice of including “basic services and overhead” expenses in the price of multiple products and services. Additionally, this disclosure eliminates the historical funeral home practice of offering customers who purchase a casket a discount off the price of the casket – an anti-competitive measure that unfairly gives the funeral home an advantage over other casket-sellers.
The Casket Price List: The FTC does not specify precise language for this disclosure, but it does require that the exact price for all caskets sold be clearly listed in the GPL.
- Notes about this item: The FTC's goal with this disclosure, as in the basic service fee disclosure above, is to eliminate the historic funeral home practice of offering customers who purchase a casket a discount off the price of the casket- an anti-competitive measure that unfairly gives the funeral home an advantage over other casket-sellers. (A further note about this time: the goal of this disclosure becomes problematic when funeral home customers are offered a discount in violation of the Funeral Rule. Many customers may be tempted to accept such a discount, but FTC officials and funeral consumer advocates discourage this since it would be putting the customer at some legal risk as an accomplice to an anti-competitive practice. For best results, consumer advocates says, a funeral home customer that is approached with an offer of a discount off the prices listed on the casket price list, should realize that the offer is illegal and consider reporting it to the FTC and discontinuing a business relationship with the funeral home.
The Outer Burial Container Price List: “In most areas of the country, state or local law does not require that you buy a container to surround the casket in the grave. However, many cemeteries require that you have such a container so that the grave will not sink in. Either a grave liner or a burial vault will satisfy these requirements.”
- Notes on this item: The FTC's goal with this requirement is to eliminate the historic funeral home practice of selling customers on burial containers that are not needed at all or that are more elaborate and well-constructed than required for practical purposes. Consumer advocates encourage funeral home customers to thoroughly research the necessity, and practicality, of a grave burial container before making a purchase.
Itemized prices on specific products and services:
A funeral home's GPL must include the home's precise, clearly labeled, prices for each of the following 16 items that it offers: forwarding of remains to another funeral home; receiving remains from another funeral home; direct cremation; immediate burial; basic services of funeral director and staff, and overhead; transfer of remains to funeral home; embalming; other preparation of the body; use of facilities and staff for viewing; use of facilities and staff for funeral ceremony; use of facilities and staff for memorial service; use of equipment and staff for graveside service; hearse; limousine; either individual casket prices or the range of casket prices that appear on the Casket Price List; and either individual outer burial container prices or the range of outer burial container prices that appear on the Outer Burial Container Price List.
Funeral homes can offer other products and services on the list, too, and many commonly offer “funeral packages” in which several of the above listed items are included for one, usually discounted, price. The FTC requires that the contents of these packages be clearly defined on the price list and that none of the packages include goods or services that are not also available individually. The lists are also required to be up-to-date and accurate, and should reflect the prices the funeral home actually charges.
Many funeral homes have been found to refer to this FTC rule when denying select customers' request for discounted or pro-bono services, but the FTC is clear that occasional discounts for family, friends, or disadvantaged families is a perfectly acceptable and fully legal practice, even if it seems to violate the letter of the Funeral Rule
“Of course, you can offer a discount when there are special circumstances, such as arrangements for a friend or relative or a family that otherwise could not afford your services,” the FTC says in its document about complying with the Funeral Rule. “The Rule does not prevent you from doing this. However, you should not inflate the prices on any of your price lists in order to offer all or most of your customers a discount. In that case, the "discounted" prices would be the accurate prices and should be reflected on the price lists.”
Charges for Minimal Services
Of the services listed in the above section, four are considered “minimal” under the Funeral Rule and their prices on the GPL are required to include the “basic service fee” that is not included in the prices of the other services listed. The FTC's goal with this requirement is that families be able to economically hire funeral homes to provide these minimal services without having to bear the full brunt of the basic service fee that may be charged to customers needing (or just wanting) more specialized services. The Minimal Services are forwarding of remains, receiving of remains, immediate burial and direct cremation.
This item in the GPL can be confusing, but consumer advocates will likely argue that it's the most key, and it’s the one that consumers should give the most attention when scrutinizing their funeral home bill. The FTC includes this item on the GPL to eliminate the historic funeral home practice of surreptitiously “double-dipping” (i.e., collecting for “basic overhead and services more than once). In general, funeral homes are allowed to ask a basic rate that all customers (except those hiring only minimal services) are required to pay in addition to any other services charged. BUT with this charge, funeral homes are not allowed to factor the cost of “basic overhead and services” into the price of their other products and services. Enforcing this rule, is admittedly difficult, but consumers are best suited in being aware of it: inflated prices (when compared to competitors) on services not included as “basic services” may be a sign that a funeral home is attempting to double-dip. Consumers would do well to exercise great caution – and perhaps even re-consider their relationship with their funeral home – if they notice such inflation.
If a funeral home offers any of the following 16 services, their prices must be listed on the GPL, and these prices must not include any compensation for “overhead or basic services” because those charges must be included in the “basic services” charge, of course. The extra services are the following: transfer of remains to the funeral home; embalming; preparation of the body; use of facilities and staff for viewing; use of facilities and staff for funeral; use of facilities and staff for memorial ceremony; use of staff for graveside services; hearse; limousine; casket; outer burial container.
Funeral homes may establish special price lists for specific groups such as the following: Children and Infants; Government Agencies; Religious Groups; and Memorial Societies. These price lists, of course, must follow all the same rules as for the GPL, and, without an alternative services price list, a funeral home may not legally offer these specific groups special pricing or services.
Other Funeral Rule Requirements
While the GPL is the heart of the Funeral Rule, the FTC does enforce a number of other requirements under the rule. They are listed below:
Statement of Goods and Services Selected
Funeral homes are required to carefully document each customer's order, before a sale is considered collectible, a customer must sign indicating formal approval of each GPL item or service ordered.
Telephone Price Disclosures
Funeral homes are required to share information in their GPL with anyone who calls requesting it. Funeral home employees may ask for customers to identify themselves before they share the information, but identification is optional. The funeral home must supply the requested information about the prices of goods and services anonymously, if the caller declines to be identified.
As the Funeral Rule was being negotiated, consumer advocates documented great evidence that funeral homes once routinely misrepresented several key matters during their discussions with customers and, accordingly, made many unjustified sales. Accordingly, the Funeral Rule specifically prohibits funeral home employees from making false or misleading statements about the following: embalming (it is usually not legally required), caskets for direct cremation (full caskets are almost never a legal requirement), outer burial containers (these are rarely necessary from a legal or practical point of view, but some cemeteries require them as is their legal right); preservation of remains (no casket will protect remains from – potentially immediate – decomposition); cash advance items (funeral homes must declare their precise mark-up rates on services such as newspaper obituaries and death certificate orders).
Prior Approval for Embalming
Funeral homes may not legally embalm a body without prior approval from a family.
Funeral homes must keep copies of their GPL's for at least a year after they have stopped distributing them (i.e. because they have updated the list).
Comprehensions of Disclosures
All disclosures required in the GPL must be clearly legible and easy to understand.
The Future of The Funeral Rule
Death care industry observers admit that predicting the future of The Funeral Rule will be difficult to predict because it depends a great deal on the unpredictable political and economic climate of the United States. The FTC's very enforcement of the Funeral Rule, for example, will likely vary with the national political culture. As the political climate leans toward an overall preference for fewer and fewer government regulations of business, the FTC's enforcement measures will likely rely mostly on death care companies to police themselves or consumers to take it upon themselves to do business with the death care companies that best comply with the Funeral Rule. This is why consumer advocate groups such as the Funeral Consumer Alliance strongly encourage (and will likely continue this for many years into the future) an informed consumer. Before families step into a funeral home or other death care establishment, they would do well to have a solid working background knowledge of the industry in which they are partaking and the issues that are relevant to their getting the services they want or need at prices they deem reasonable.