Companies that Provide Funeral Goods and Services Agree To Pay Civil Penalties To Settle Federal Rule Violations

In the first case to be brought against a nontraditional funeral provider -- a company that sells some combination of funeral goods (typically caskets and burial vaults) and funeral services directly to consumers but does not operate a funeral home -- Marketing Masters, Inc., and its subsidiaries (collectively called Marketing Masters), have agreed to pay a $12,000 civil penalty to settle allegations that they violated the Federal Trade Commission's Funeral Rule. The FTC alleged that the defendants did not provide a general price list to consumers during sales presentations, and failed to make the required disclosure on their outer burial container price list. Under the terms of the proposed settlement, in addition to paying the civil penalty, the defendants have agreed to comply with the Funeral Rule in the future.

The Funeral Rule is designed to ensure that consumers purchase only the goods and services they want or need. The rule was promulgated by the Commission in 1984 and revised in 1994. It requires funeral homes to give consumers who visit a funeral home a copy of an itemized general price list so they can use it to comparison shop. The rule also makes clear that consumers do not have to buy a package deal. It requires funeral homes to provide consumers itemized lists of the goods and services they have selected, so that they can be sure they are paying only for the items chosen or that state law requires.

Under the Funeral Rule, all "funeral providers" must comply with the rule. A person or entity is a "funeral provider" if it offers to sell or sells both "funeral goods" and "funeral services." Funeral goods are products sold directly to the public for use in connection with funeral services (such as caskets or outer burial containers) and funeral services are services used to care for and prepare bodies for burial or cremation, and services used to arrange, supervise, or conduct the funeral ceremony or final disposition.

According to Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection, "By bringing this case, the Commission is announcing its intent to enforce the Funeral Rule against any funeral provider whose business activities bring it within the scope of the rule, regardless of whether it operates a funeral home."

A free FTC brochure for consumers, titled "Funerals: A Consumer Guide," provides additional information about consumers' rights and legal requirements when planning funerals. Copies are available at the address below.

In the complaint detailing the charges, the FTC names Marketing Masters, Inc., (based in Lancaster, Pennsylvania), also known as Pre-Need Family Services of Lancaster County; Pre-Need Funeral Associates of Lehigh Valley, Inc. (based in Allentown, Pa.); Pre-Need Family Services of Berks County, Inc. (based in Wyomissing, Pa.); Pre-Need Family Services of Delaware Valley, Inc. (based in Exton, Pa.); and their officers, Donald E. Morris and David A. Heisterkamp. Marketing Masters sells caskets, outer burial containers, urns and memorials, and several cremation services.

According to the complaint, the defendants violated the Funeral Rule by failing to give consumers a general price list containing all of the prices and disclosures required by the rule, and by failing to give consumers, in conjunction with the price of outer burial containers, a written disclosure about the legal and practical requirements of purchasing an outer burial container.

In settlement of these charges, the defendants are required to pay the $12,000 civil penalty within five days after the settlement is approved by the district court, and are prohibited from violating the Funeral Rule in the future. In addition, the defendants are required to give each employee who sells funeral goods and services a copy of the consent decree and, for a period of five years, to maintain records showing compliance with the terms of the settlement. Also, for five years, defendants Donald Morris and David Heisterkamp must notify the FTC about their affiliation with any new business or employment in which their duties and responsibilities involve the sale of funeral goods and services.

The FTC vote to authorize filing of the proposed complaint and consent decree was 5-0. The proposed settlement were filed in the U.S. District Court for the Eastern District of Pennsylvania, in Philadelphia, on November 4, 1996, by the Department of Justice at the FTC’s request.

NOTE: This consent decree is for settlement purposes only and does not constitute admissions by the defendants of law violations. Consent decrees have the force of law when signed by the judge.

Copies of the FTC consumer brochure, the complaint and proposed consent decree are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580: 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it happens, call the FTC’s NewsPhone at 202-326-2710. FTC news releases and other documents also are available on the Internet at the FTC’s World Wide Web Site at http://www.ftc.gov

Brenda Mack
Office of Public Affairs

202-326-2182

(FTC File No. 952 3417)
(Civil Action No. 96-CV-7411)