Funeral Rule

FCA Petition calls for Revision of Outdated FTC Funeral Rule

The internet has transformed the way Americans shop from cradle to grave, the funeral industry has a little more catching up to do. A Federal Trade Commission (FTC) rule governing price disclosure for funeral homes was last updated in 1994, its language failing to predict our nation’s coming obsession with online commerce. A petition submitted to the FTC this July by the Consumer Federation of America and the Funeral Consumers Alliance seeks to update this rule to bring more funeral home pricing online and into the 21st century.

The FTC first adopted its “Funeral Rule” in 1984 and last revised it over 20 years ago – long before ubiquitous internet access and the cultural norm of online comparison shopping. The Funeral Rule attempts to provide protection to consumers by requiring funeral directors to provide a written, itemized general price list upon request and to inform consumers of their right to purchase services and products a la carte. In recognition of the vulnerability of funeral consumers in the wake of loss, such required disclosures enable the buyer to make informed decisions about the funeral services and products they purchase. However, as written today, the rule applies to requests for pricing either over the telephone or in person. Nothing in the rule contemplates the role the internet now plays in making purchasing decisions. As consumers have grown used to the transparency and ease of price comparison online, the Funeral Rule has been left untouched, and the funeral industry has been reluctant to change on its own. An October 2015 survey of funeral industry practices nationwide revealed that fewer than 25% of funeral homes with websites fully disclosed their prices online.

Of those funeral providers that do publish prices online, many only disclose their rates for all-inclusive packages without informing consumers of their right to purchase products and services a la carte. If these funeral homes failed to inform consumers of this right in a paper disclosure, it would directly violate the FTC Funeral Rule. However, as it stands today, it is completely legal for a funeral home with a website to publish limited, misleading, or even no pricing information online. Bereaved consumers visiting these websites are often met with slick targeted marketing, but denied crucial information about the costs associated with the images being sold.

The costs are not insignificant. In 2015, the median cost of a funeral with viewing and burial was just over $7000. However, a 2011 study cited by the petitioners found that approximately half of all American households would struggle with an unexpected expense of only $2,000. Few people would consider a funeral an optional expense, but many Americans have difficulty affording one in today’s market. When prices are kept out of public sight, the market lacks the competition necessary to lower costs.

The petition from the Consumer Federation of America and the Funeral Consumers Alliance calls for the FTC amend its Funeral Rule to include mandatory online price disclosures for funeral homes with websites. Proponents of the amendment argue that requiring online price disclosure would bring funeral homes into compliance with the spirit of the original Funeral Rule – that a consumer engaging in a sales interaction with a funeral home has the right to an itemized general price list, whether that interaction is in person, on the telephone, or through a screen. They also argue that increased availability of pricing information online will act to deflate the artificially high funeral industry prices through consumer access and choice.

Although the Funeral Rule is slated for review in 2019, consumer advocates are adamant that now is the time for revision. In a press release from the Consumer Federation of America, Josh Slocum, Executive Director of the Funeral Consumers Alliance, remarked, “We hope that the FTC acts promptly upon our request. … Grieving families don’t have time to wait.” The petition was submitted on Amazon.com’s “Prime Day” to underscore our culture’s firm entrenchment in its online shopping habits.

Erin McKee, JD, MFA


FCA and CFA Study Show Funeral Rule Isn't Working

It's been over thirty years since the Federal Trade Commission's (FTC) Funeral Rule was enacted in an effort to make funeral pricing more transparent and straightforward. The Rule, which is enforced by the FTC, makes it possible for consumers to choose only those goods and services that are actually needed or wanted and to pay only for those goods and services selected. The Rule is also supposed to allow consumers to compare prices among funeral homes. It requires funeral homes to give customers their price information over the phone when asked, and also requires that they give customers an itemized list when they visit the funeral home. Unfortunately, nearly thirty years later and consumers are having just as difficult a time getting pricing information.

A survey published on October 19, 2015, by the Federal Consumers Alliance (FCA) and the Consumer Federation of America (CFA) showed what a terrible job funeral homes and cremation businesses do in disclosing their prices. The report released by the FCA and the CFA was based on a national survey they conducted of the prices and price disclosures of a representative sample of 150 funeral homes from ten different regions of the country. The survey found that only 38 of the 150 (25%) funeral homes disclosed their prices on their website and 24 (16%) failed to disclose pricing on their website and in response to an email and a phone call. The most striking information was the price variances in a single city. In D.C. the price for full service funerals was found to range from $3,770 to $13,800. The cost for the same funeral services varied by at least 100% in every city and sometimes by as much as three times the cost of the lowest service. As the CFA Exective Director, Steven Brobeck, points out, these dramatic price ranges for identical funeral services indicate that the "markets lack effective competition."

Now, consumer advocates are asking the FTC to require funeral homes to post pricing lists on their websites. The FCA Executive Director, Josh Slocum, says that the FTC needs to update its antiquated disclosure rules, which were last updated in 1994, before the internet. California is cited as an example of a jurisdiction that has done just that, and now requires funeral homes to disclose on their websites the same pricing that the FTC requires to be disclosed by phone or in-person. The FCA and CFA are releasing their research to the FTC and urging them to update the Funeral Rule to require price disclosure on funeral home websites.   

Emily Morris