Subject: FCA commentary

October 8, 2002

To: The Federal Trade Commission
From: Funeral Consumers Alliance (FCA)
Re: Internet casket sales

General Issues

FCA believes that consumers should have a wide range of shopping options for funeral goods and services, including the ability to purchase merchandise via the Internet. Internet shopping has some distinct advantages:

• it can be done outside of normal business/work hours;
• it is available to those who are home-bound and unable to get out;
• it provides a sense of privacy when shopping;
• a greater variety of designs is available than is usually found at a funeral home;
• better prices are generally available;
• comparative shopping is much easier;
• with a credit card purchase, consumers have some built-in protection against faulty delivery.

Does state regulation have protectionist effects? What is the prevalence of such state regulation?

With the political influence of state funeral boards, several states -- including Oklahoma and Virginia -- still restrict the selling of caskets to licensed funeral directors. Such a restriction limits the retail casket business, whether over the Internet or in person, and drives up shipping costs if a consumer is purchasing such a casket.

Issues specific to the funeral and casket industry

How has the advent of the Internet affected the industry overall?

In the past, price advertising for funeral goods and services was taboo. The Internet has brought more open price competition, driving prices down in such areas as Austin, TX and Portland, OR. We expect this trend to continue.

How have specific industry members adapted to changes arising from new sales channels?

Some funeral homes have jacked up service prices and lowered casket prices to compete with retail casket sales. Or they may offer discounted packages to consumers who purchase the casket from the funeral home but charge higher prices for consumers supplying their own caskets. In such situations, the consumer has not been able to benefit from true competition.

Are there deficiencies in current regulation that allow consumers harm?

One area of concern for consumers is pre-need casket purchases. In fact, pre-need funeral and cemetery funds are not well protected in most states. Embezzlement and other forms of non-delivery of goods and services has occurred in almost every state. In a few states, casket retailers must put pre-need money in trust under the same guidelines that apply to funeral directors, but there are few if any guidelines for interstate sales such as often occurs via the Internet. While we have heard of no specific complaints against internet casket sellers, we do believe better consumer protection for ALL pre-need sales is in order.

Respectfully submitted,