Your Funeral Home May Be Scamming You

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Funeral homes have long been accused of taking advantage of their customers, who are forced to make a series of expensive decisions in the immediate aftermath of a loved one’s death, when they’re extraordinarily vulnerable. And a recent investigation by the Federal Trade Commission finds that — despite frequent crackdowns — deceptive and manipulative practices continue at a strikingly high percentage of funeral homes: About one in five, in fact.

In 2012, 23 of the 127 funeral homes, or about 18%, that the FTC visited undercover “significantly violated” the federal agency’s Funeral Rule, a 1984 law that requires funeral homes to give consumers itemized price lists, prohibits them from requiring the purchase of certain items like caskets as a condition to get other products and services, and bars aggressive selling of services not required by law, like embalming.

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The highest occurrence of violations among the areas checked this year were found in the Brownsville/Harlingen area of Texas, where 8 of the 21 facilities visited broke the rules; Everett, Wash., where four of the 11 funeral homes were cited; and McAllen, Texas, where four of 18 were in violation. In addition to the 23 where “significant” violations occurred, the federal agency says another 43 additional funeral homes were in violation of more minor compliance issues.

While the FTC doesn’t release the names of the violators, it does attempt to get funeral home operators to comply with the rule by either enrolling them in a three-year program called the Funeral Rule Offenders Program, which serves as an alternative to a possible FTC lawsuit and fines of up to $16,000. So far only one funeral home in violation had not signed up, and it remains under investigation, according to the FTC.

The FTC found more violations in 2012 than the year before, when it discovered that 16 of 102 funeral homes investigated had significantly violated federal law. But last year’s number was far lower than in 2009, when the FTC found 49 “significant” violations in 175 homes, or about 30% of those visited.

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For years, the funeral home industry has been criticized for pushing unnecessary products and services onto the grief-stricken. In the 1960s, Jessica Mitford’s muckraking classic The American Way of Death chronicled the industry’s business practices, shedding light on the kind of merchandise sold to mourning families. It took two decades for the federal government to implement the 1984 Funeral Rule to crack down on some of the industry’s practices. But even with the 30-year old rule in effect and the threat of financial penalties, a significant number of homes still don’t appear to be complying.

26 comments
Danisard
Danisard

For anyone that reads the above article, let's put things in perspective.  The FTC surveyed 102 funeral homes.  They found 16 were out of compliance to some degree.  That is a significant percentage, but keep in mind there are almost 20,000 funeral homes in the US!  The FTC, like many institutions, publishes the statistics that support its work.  They don't disclose how they picked those 102 firms.  They don't disclose how many other firms were surveyed without being included in their study for one reason or another.  Fanning the flames of distrust is good business for a watchdog agency.

To those that claim funeral homes prey on people at a time of loss, this is totally without basis.  It is possible that they could, but I have been fortunate to be inside of more than 2,000 funeral homes in my life.  I have seen this profession from behind the curtains.  I have seen the profit margins of this business slide from 14% to about 6%.  Profit margins don't slide by 65% if you are taking advantage of consumers!  

This profession is an easy one to pick on.  The reality is a boring story of people that care for widows and orphans, 24 hours a day, 7 days a week, every single day of the year.  They extend credit to families that need to pay for funerals over time, without collateral.  No big box retailer does that.  Even the FTC when they assess a fine won't let someone pay over time without collateral.  If the FTC were to take on restaurants as they took it to funeral homes, we would get a bill for lunch that is 7 inches long, breaking out a fee for each plate used, the number of times a server brought us something, and giving the consumer the right to get food cheaper if the kitchen withheld salt!  No, Mr. Sanburn, your article is not new.  It is not enlightening.  It is dismissing the efforts of people that should be praised in our society, not ridiculed.

notLostInSpace
notLostInSpace

A hundred years or so ago a person would die, they'd mourn the person in their living room and do the burial in a cemetery plot.  No expensive rides in Cadillacs, fancy caskets, permanent cement bunkers, fancy rooms full of flowers.  Are we better off?  I don't know, but I think it is sad that society expects all of this.  The survivors are not in a position to negotiate nor think clearly.  It is also very much like the whole stupid expensive ritual of marriage (expensive ring 1, ring 2, dinner/dancing/church/honeymoon) where most new couples really could use the money on a house or paying off debt instead of having a big party. That is where the scam is, that society has been persuaded that 'this is the way we do it'.  BS.  But if you don't do it that way people think your are ignorant, stupid, cheap. 

shaneritchie
shaneritchie

Mr Babbitt

When my 24 year old daughter died a traumatic death in 2007, the embalmer who took care of her gave me the greatest gift anyone could have given; the ability to see her, to hold her hand and tell her goodbye. They told us that the trauma was bad and she would not be able to be viewed but the embalmer went above and beyond using his God-given skill to bring my daughter back to me. No amount of money could ever repay him for what he gave me. No Mr. Babbitt, embalming is NOT disgusting or unholy as you put it. The skill of this professional embalmer saved my wife and my sanity. God bless him and embalmers everywhere.

DougMcHoul
DougMcHoul

As the owner of a family owned & operated funeral home, I feel obligated to comment on your article:I'm a bit disappointed that you neglected to speak with even ONE funeral director to inquire about the details involved with an FTC inspection. What the commission would consider a serious violation could be something as minimal as mis-categorizing an item on a general price list. Funeral homes often fall victim to media scrutiny, and that is understood given the sensitive nature of our work. But it's important to remember that most funeral directors see our profession as a service, not a business. There are those of us who work with less fortunate families in order to alleviate the financial burden; who provide 100% of our services and goods at no cost for families facing insurmountable tragedy such as the loss of a child; who donate tens of thousands of dollars a year to local nonprofit organizations; and that's the short list. Perhaps you weren't imformed of the charity and empathy demonstrated by several Connecticut funeral homes after last year's Newtown tragedy. I have always said that if I didn't have a family to feed, I'd be happy to do my job pro-bono. Yes, there are funeral homes that value their profit more than their ministry, and you'll find they don't last too long in this business. I, on the other hand, earn my reward from the sincere, genuine acknowledgement of appreciation and gratitude shown by client families. That is the true face of our industry.

cheapcremation
cheapcremation

 @LizHollister-Garcia Whilst I agree that some pre-planning can save a family undue stress and decision-making at the time of death, there are still many risks with pre-paid funeral plans.  Just look at what has happened recently in Wisconsin.  Not only that, CNN Money reported only the other week that 76% of Americans are "living paycheck to paycheck".  This is a more realistic and brutal reality about the changes happening in the death care industry.

It is also reported that funeral home revenue is down 37% due to the trend towards cremation and simpler alternatives.  Now it makes sense why some desperate funeral homes will consider violating FTC rules to help their bottom line!

The funeral industry, as a whole, seems to be ignoring consumer demand and hoping things will go back to the way they were!  Well, wake up and smell the coffee....we are going to see many funeral businesses closing down over the coming years.

DFS Memorials is a network of independent funeral homes that all guarantee a low cost funeral or cremation alternative, and provide complete disclosure in pricing (and ownership - no corporate companies hiding behind family-sounding names!)  We believe every American has the right to affordable dignity in death and the majority of our providers all offer a complete cremation package at the most affordable cost for their area.  As the price ticket goes down - it is all about volume sales, and many of this providers are now extending their service areas.

We deal with providers in Texas, for example, who will cover distances of 100 miles for a $595 direct cremation, to a family who have been told the same service will cost them $3,000 from their local funeral home.

This is the future of funeral service!  There will always be the 1% who will want full traditional, and there will be the small percentage who decide on some unique memorialization, but the masses want cheap cremation.

George_Babbitt
George_Babbitt

The only thing I took away from this is the hopefully true bit of information that the disgusting and unholy act of embalming is NOT required by law! WOOHOO!

LizHollister-Garcia
LizHollister-Garcia

This article, which is unfair due to the small sampling of Funeral Homes investigated, should be another wake-up call for responsible adults to pre-arrange and pre-fund their services. The emotional over-spending does not occur, it allows time to think about the services and desired and make financially responsible choices about the merchandise needed. It gives the opportunity to have in put from the people who will be most effected by the death. Pre-arranging doesn't cost anything and pre-funding locks in prices, relieves loved ones of financial burdens, it allows family members to honor your wishes and spares family members from wondering if they did the right thing. Not to mention, it is one of the few things Medicaid can not consider an asset therefore it is protected from "spend down" requirements. The Funeral Homes in my state are required to deposit any money accepted as pre-payment into a third-party Trust and do not have access to the funds until the time of death. We can not run off with the money, it is not lost if the funeral home sells or closes and it is transferrable if you move.

Liz Garcia

Bubb Funeral Chapel

Mishawaka, Indiana  

rutnerh
rutnerh

We are being scammed or overcharged by just about every business or govt agency in our greed driven economy. Why demand higher standards from funeral parlors which from my unbiased observations have littlle floor traffic and high overhead. And there are low cost options available.

KentR
KentR

We dealt with the salesmanship  of a Funeral home March this year  With the Passing of my Dad  Luckily my parents had planned for this  and budgeted for it    it was about 10 grand  including a Proper bronze  marker for the Grave sight the family had bought  burrial plots years ago  and due to errors in the plat  had to trade  plots twice over the years  due to errors by the management of the cemetery . 

notLostInSpace
notLostInSpace

@DougMcHoul I don't dispute that you do work for nothing or inexpensively in some situations, but would argue that someone pays for that.  Why not have one price list for everyone?  In essence, when you decide to do pro-bono work you are making someone else subsidize that.   It's not just your industry.  I'm flabbergasted that no one has a problem that Microsoft gets a bunch of money for an operating system for every computer sold (and if you have bought a lot of computers like I have over 30 years you have bought many duplicates) but it is ok for Mr Gates to give away billions.  How about a price reduction instead Bill?

Marylafl
Marylafl

@DougMcHoul I dont care if you owner or not , every Funeral Home  in every State and City is a scam taking advantage of people who are dealing with tragedy , by sweet talking feeling sorry. But the bills comes later  nothing is free or charity , you will get your money  back  the way you only know .There is no such true face in this industry . I hope FTC inspection goes and check every Funeral in whole country. Don't cover yourself with Newton tragedy -you forgot about donations ?I can go on and on. -there is no free service , nothing free . You will not exist on any charity. I"m dealing with prepaying for my mother -so I know what a scam is this , they will not full me. Did you forgot few years ago in Texas when they drop body in front of family home -they have no money for funeral .

I

notLostInSpace
notLostInSpace

@George_Babbitt  I know this is not true, but can't help thinking that if you were one of those weird cases of someone appearing to be dead....you will never recover if you have been embalmed.  However, on the bright side, you won't wake up inside of a buried coffin like in the horror movies and have to scratch your way out  :)

KittyJoyce
KittyJoyce

@George_Babbitt  People always assume they are going to die of natural causes....nope, sometimes people are horribly disfigured after being in a car accident at college...sometimes the parents want to see their dead kid...yeah, embalming comes in handy.

rodzilla
rodzilla

@LizHollister-Garcia You're quite right to recommend pre-arranging your funeral. Any of us who have been down the road of putting together funeral arrangements without knowing the wishes of the deceased will surely testify to the value of doing that.

But, unless you are a client of medicaid (as you mention), there's hardly ever a good reason to prepay for a funeral (look no further than problems in Wisconsin or Illinois for proof of that). I know that funeral homes make a profit from selling ahead of time, but better to put the money aside somewhere (savings account?) and let your survivors know where it is and what it's for. "Totten" trusts are sometimes available for funeral moneys, but almost anyone would be better off not to prepay.


Marylafl
Marylafl

@LizHollister-Garcia Please stop that BS, Liz , I know you covering your place . Every funeral  Home is a scam . The only emotional face we will see when  we pay thousands for them . I heard your story before . One big fat lie .We are working through whole ours life , so when comes to the end most of our money ( thousands )go to thief's  instead our children .Nothing is free!!!!- pre-arranging( included later) pre-founding ( same - later)

KittyJoyce
KittyJoyce

@Marylafl @DougMcHoul You are so incredibly ignorant!!!!!  First nobody can force you to anything you don't want to. The rules and laws are in place, and you can shop around, lot's of burial...or perhaps in your opinion, medical waste options. :/  For myself,I put in eighty hour weeks for the people I serve. I went into this industry at age nineteen because of my own personal  life changing tragedy. I love being a woman in funeral service. I have sat by the bedside of many dying people helping them plan their own memorial tribute. Unlike a psychiatrist, or other care giver I have never said, "sorry your hour is up, time gotta go."  Funeral Directors are always being pulled away from family functions, their own children s parties not to mention how many sleepless(UNPAID) nights tending to the shock and despair of others losses. It is not a job to me , it is a vocation, however, I do get a pay check for 75% of my hard work. Imagine that. Civilized humans have ALWAYS, ALWAYS, ALWAYS made an investment when it came to the memorialization of their dead. Nothing is for free honey.  Except for ALL the children's funerals I have run over the past twenty years...however, funny thing, the newspapers still charged for the Obits, I guess the news paper people deserve it more, sitting at a computer not awkwardly trying to help devastated parents pick out readings for the services, etc. or trying to rebuild little faces or reduce bloating from a drowned toddler so the siblings can say goodbye and maybe place a card or stuffed animal in the casket......Yeah, been there done that.  Anyway, you can donate your old lady to a med school if you are really worried about the cost, and some insurance pays for direct cremation, you could have a service at your home for free, unless you spring for beverages(like we do at our home not to mention candy , tissues, air conditioning and toiletries.  Futhermore...I love my parents and plan to spend something fair and decent on a respectable funeral for them...they did everything for me in life. Sorry you look at your mother as a burden:/  We have people spend thousands on funerals for their dogs....some people choose to that. Whatever........................

AnonForMyProtection
AnonForMyProtection

@Marylafl @DougMcHoul I guess I don't understand you--are you expecting a funeral home to just give you a free funeral?  You do understand they have a business to run, right?  If you go into a funeral home with a budget, understand that you can tell them no, and just get what you want, how are they scamming you?  Every funeral home has one non-declineable fee, which is simply the fee for the funeral home.  Some are more expensive than others--shop around.  You can "shop" every other fee--including the fee for removal from the place of death, if you're savvy enough.  You can purchase a casket at Costco or a casket store, if you like--you are not obligated to purchase a casket from the funeral home of your choice.  You can even purchase caskets on the internet.  The same goes for an outer burial container--and always find out if the cemetery you are burying at requires an outer burial container.  That can save you money, as well.  You can get a cemetery space at ANY cemetery you want--not specifically one located at the funeral home.  You can get a marker/monument from anyone; you may have to pay a small fee for installation, but it's usually a nominal fee.  The FTC exists to keep funeral homes on the up and up--whether you prearrange or not.  I agree with Doug--you've not been dealing with the right funeral home.  If you're dealing with a prepayment for your mother and you feel as if you're being scammed, cash in the policy and go somewhere else.  You are NOT stuck with that funeral home.  And this is free information from someone who works at one of those despised "corporate" funeral homes--please don't judge all funeral directors as shady, no matter where they work.  We're not all bad people--and we're not all exceedingly well paid.  I certainly live paycheck to paycheck,just like most others.  If you think the consumer is being screwed, you haven't seen anything compared to the way some of the employees at corporate funeral homes are treated.  

rodzilla
rodzilla

@Marylafl I volunteer a lot of time for the Funeral Consumers Alliance (funerals.org) and a local affiliate which monitors funeral home behavior, and I think you're wrong. Family owned and operated FH's are *usually* the only ones I'd semi-trust, even though there are surely bad guys among them. The ones I fear are the corporate outlets (anything under the banner of dignity memorial: if they need to use the word, you probably shouldn't expect it) or the small, shady, fly-by-night operators offering prices significantly lower than you'd normally see (you'll pay more eventually). Doug sounds like one of the good guys here, and he's right: shop around, maintain some flexibility, and find the right one for you and your budget. Don't expect something for nothing, and don't pay an exorbitant price.


And never prepay for funeral arrangements ahead of time, even with a *guarantee* unless in very limited circumstances (medicaid client). THAT's the scam you should be railing against.

DougMcHoul
DougMcHoul

I'm sorry to hear about the skepticism you have regarding pre-planning. I know that the regulations vary state by state, but I can tell you that the laws in NY are 100% consumer friendly and there is no "catch" whatsoever. With regards to Newtown, yes there were donations... The Connecticut state funeral directors association donated ALL of the professional services and Matthews Casket Company provided the caskets at no charge. Outside donations likely went to cover cemetery and monument fees.

Unfortunately, I believe that you have never interacted with a good funeral home. To say that all funeral directors are scam artists is an outrageously uninformed statement. What the FTC provides you with is this: you have options! You are not obligated to pay for services you wish to bypass. Cremation is a resourceful economic approach as well. I know that many believe that funeral directors live lavish lifestyles and earn incredible salaries, but if you did some objective research you'd discover that the average funeral director in the US is paid well bel

KittyJoyce
KittyJoyce

@Marylafl @LizHollister-Garcia  Oh, how I wish I could refuse to work with people who don't respect my, time and efforts. I love being a strong woman, Embalmer and  Funeral Director. I give tireless, often unpaid hours to provide grief counselling.......even to losers who don't appreciate it. I believe in a little thing called KARMA.  Dealing with sadness and death does that to a person. :/ 

AnonForMyProtection
AnonForMyProtection

@Marylafl @DougMcHoul Additionally, what keeps me coming to work every day is what I provide for my families--trust.  If I lose that, there's no point to my job.  This is a profession, a calling.  Not everyone can do it, nor should they try.  When they do, that's when you have these idiots in the news, dumping bodies in ditches and commingling cremated remains.  That is sickening to anyone with a heart, and if you don't have a heart, you shouldn't be in this profession.  I'm so sorry you have had dealings with a funeral home you don't trust; please don't judge all funeral homes by your dealings with just that one.  


DougMcHoul
DougMcHoul

...continued.... Your FIRST question should ask whether the firm is corporate or family owned. When a family's livelihood is based on client satisfaction, there is no doubt that they will work 150% to meet your needs and preferences. At a practical budget. There are some good guys out there!

DougMcHoul
DougMcHoul

Sorry I was cut off-

... Is paid well below the income of a labor or transportation union member: with far less benefits.

Additionally, you would be interested in knowing that the average funeral home's profit margin falls between 10 & 15%.

Our increased overhead is simply based on consumer preferences.

Remember your options - compare general price lists, casket price lists and other merchandise prices. Don't feel limited to have services within your own town; research funeral homes in the surrounding area. Ask about their payment policy. If you feel you're being persuaded, decline the services. And in my opinion