FTC Reviews Funeral Rule

The Federal Trade Commission today announced it is beginning a review of its Trade Regulation Rule on Funeral Industry Practices ("Funeral Rule"). The proposed action is part of the FTC's ongoing review of its Rules and Regulations. The Commission will publish shortly a Federal Register notice soliciting comments on the overall costs, benefits and the continuing need for the Funeral Rule. In addition, because of changes in the funeral industry, the Commission is also seeking comments on whether the rule should be modified to broaden its scope to include non-traditional providers of funeral goods or services; revise or clarify the prohibition on casket handling fees; or prohibit non-declinable funeral fees. Comments will be accepted until July 12, 1999.

The FTC's Funeral Rule, which became effective in 1984, and was amended in 1994, requires providers of funeral goods and services to give consumers itemized lists of funeral goods and services that not only state price and descriptions, but also contain specific disclosures. The "General Price List" (GPL) must list all prices for funeral goods and services offered by the funeral provider, although separate price lists may be developed for caskets and outer burial containers. The GPL must contain four disclosures: (1) the consumer has the right to select only the goods and services desired; (2) embalming is not always required by local law; (3) alternative containers are available for direct cremations; and (4) the only fee which a consumer can be required to pay is a non-declinable basic services fee. The rule enables consumers to select and purchase only the goods and services they want, except for those which may be required by law and a basic services fee. Also, funeral providers must seek authorization before performing some services, such as embalming.

In addition to soliciting comments directed at the standard regulatory review questions regarding the economic impact of and the continuing need for the Funeral Rule; the possible conflict between the Rule and state, local or federal laws; and the effect that any technological, economic or other industry changes have had on the rule, the Commission is also seeking comments on a number of other material issues. The Commission recognizes that because of the rapid change occurring in the funeral industry since the Rule was amended in 1994, additional modification to, or recission of, the rule may be warranted.

The Commission is seeking comments on several important provisions of the Rule to determine whether they are effective, what impact they have had on consumers and funeral providers, and the efficacy of these provisions. Specifically, the Commission is seeking comments on:

• expanding the scope of the Rule to include cemeteries, monument dealers, and casket sellers, and redefining "funeral provider;"

• clarifying the effectiveness of the Rule's "unbundling" provisions which were intended to promote competition and increase consumer choices (the "unbundling" provisions prohibit "handling fees" placed by funeral homes on caskets purchased elsewhere);

• clarifying the effectiveness, costs and benefits of the "basic services fee" -- defined as the charge for the services of the funeral director and staff; and

• revising the "General Price List."

Written comments concerning the Funeral Rule must be received by July 12, 1999 and should be identified as "16 CFR Part 453" and should be submitted to the Secretary, Federal Trade Commission, Room H-159, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580. Written comments should also be submitted in electronic form. Comments sent by e-mail will be accepted and should be sent to "funeral@ftc.gov"

The Commission vote to publish the Federal Register notice was 4-0.

Copies of the news release, the Federal Register notice, as well as other documents associated with the Funeral Rule, are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 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 news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(FTC Matter No. P984407)