FTC Announces Results of Inspection of Funeral Homes in Michigan Area for Compliance with Consumer Protection Law

The Federal Trade Commission today announced the results of a sweep of 42 funeral homes in the Detroit, Grand Rapids and Lansing areas. Seven of those homes appeared to be in violation of the FTC's Funeral Rule. The sweep was part of an ongoing nationwide law enforcement program, coordinated by the FTC's Cleveland Regional Office with the Michigan Attorney General's Office. Staff from the FTC, Michigan Attorney General's office, the Detroit Consumer Affairs Office, and volunteers from the American Association of Retired Persons (AARP) acted as test shoppers. The test shoppers visited the funeral homes to determine whether the homes provide consumers with a copy of an itemized general price list and show consumers itemized casket and outer burial container price lists -- both key requirements of the FTC's Funeral Rule. (The Funeral Rule is designed to ensure that consumers making funeral arrangements receive price lists and are informed that they can purchase only the goods and services they want or need.)

The seven funeral homes considered to be in violation of the Funeral Rule will be given an opportunity to resolve the possible law violations by participating in the Funeral Rule Offenders Program ("FROP") in lieu of paying a civil penalty and the filing of a complaint and consent decree in federal District Court.

The FROP program, announced in January 1996, was developed as a joint effort between the National Funeral Directors Association ("NFDA") and the FTC to boost funeral industry compliance with the FTC's Funeral Rule. Under the program, funeral homes that have failed to give test shoppers the itemized price lists required by the Rule are given the option of entering the FROP program rather than face possible formal legal action and the risk of paying a civil penalty. If they choose FROP, they make a voluntary payment to the U.S. Treasury or state Attorney General and enroll in a compliance program, administered by the NFDA, which includes a review of price lists, training on compliance and follow-up testing and certification.

Since the inception of FROP, funeral home "sweeps" have demonstrated overall that nationwide compliance among funeral homes has increased since 1994. At the end of 1997, a total of 574 homes had been test-shopped and FROP was offered to 74 violators as an alternative to litigation.

The FTC's Funeral Rule, promulgated by the Commission in 1984, was revised in 1994. One of the key requirements of the rule is that funeral homes must give consumers a copy of an itemized general price list, which they can use to comparison shop, at the beginning of any discussion regarding funeral arrangements, goods, services or prices. The general price list must contain a number of disclosures and other information -- including, for example, that embalming is not necessarily required by law. The FTC's rule also makes clear that consumers do not have to buy a package funeral, but, instead, may pick and choose the goods and services they want.

A free FTC brochure for consumers, titled "Funerals: A Consumer Guide," provides additional information about consumers' rights and legal requirements when planning funerals. A free FTC handbook entitled "Complying with the Funeral Rule," provides information to funeral providers on complying with the FTC's Funeral Rule.

Copies of the brochures are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov and from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP/202-382-4357; TDD for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC's Newsphone recording at 202-326-2710.