FTC Announces Results of Inspection of New Jersey Funeral Homes For Compliance With Consumer Protection Law

As part of an ongoing nationwide law enforcement program to identify funeral homes that fail to comply with the Funeral Rule, the Federal Trade Commission today announced the results of a funeral home sweep in New Jersey. The FTC used test shoppers from the American Association of Retired Persons (AARP), who visited 36 funeral homes to determine whether the homes provide consumers with a copy of an itemized general price list, a key requirement of the FTC's Funeral Rule. Five of the funeral homes that AARP members visited appeared to be in violation of the FTC's Funeral Rule, and all five homes have agreed to enroll in the new Funeral Rule Offenders Program ("FROP").

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 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. As a result of this sweep and entry in FROP, these five funeral homes will make a total of $25,750 in voluntary payments to the U.S. Treasury. The payment is, however, lower than the civil penalty the FTC might obtain in a formal law enforcement action for Funeral Rule violations, which can amount to up to $11,000 per violation.

"AARP is pleased to be part of the FTC's funeral home sweep in New Jersey and is encouraged that abusers of the Funeral Rule have been detected," said AARP's Northeast Region Consumer Representative, Annette Buchanan. "AARP has long been concerned that funeral homes are not complying with the Rule's requirements that price information be available to consumers. Given the enormous cost of burial services as well as the emotional stress involved with such a purchase, it's vital that consumers receive all appropriate information before making a decision." In addition to AARP's participation, assistance was received from the New Jersey Division of Consumer Affairs.

Since the inception of FROP, funeral home "sweeps" have demonstrated that nationwide compliance among funeral homes has increased. Nearly 90 percent of funeral homes subjected to test shopping in 1996 complied with the key general price list requirement. Specifically, since January 1996, the FTC has test-shopped 309 homes, 35 of which were found in violation of the rule, with 30 funeral homes voluntarily joining FROP. These previous sweeps netted ten violators in Massachusetts, five violators in Ohio; one violator in Colorado; ten violators in the Chicago area; and four violators in D.C. More sweeps are expected to be launched soon.

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 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 FTC news as it is announced, call the FTC's NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov

Brenda A. Mack

Office of Public Affairs

202-326-2182

Laurie Meehan

Bureau of Consumer Protection

202-326-3755  

Denise V. Tighe

New York Regional Office

150 William Street, Suite 1300

New York, NY 10038

(212)264-3010