FTC Announces Results of Largest Statewide Inspection of Funeral Homes in Iowa for Compliance with Consumer Protection Law

As part of an ongoing nationwide law enforcement program, the Federal Trade Commission and the Office of the Attorney General for the State of Iowa today announced the results of the largest statewide sweep of funeral homes to test for compliance with the FTC's Funeral Rule. A total of 62 funeral homes were test shopped in 15 Iowa cities. The FTC’s Chicago Regional Office coordinated the sweep with the Office of the Attorney General for the State of Iowa and the American Association of Retired Persons (AARP) volunteers. The test shoppers visited funeral homes in Bettendorf, Burlington, Cedar Rapids, Clinton, Council Bluffs, Davenport, Des Moines, Dubuque, Iowa City, LeClaire, Mason City, Monticello, Mount Pleasant, Sioux City, and Waterloo 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. Six of the 62 funeral homes visited were considered to be in violation of the Funeral Rule.

These six funeral homes 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. Nearly 90 percent of funeral homes subjected to test shopping in 1996 complied with the key general price list requirement. Specifically, in 1996, the FTC and state Attorneys General offices test-shopped 309 homes in seven states, 35 of which were found in violation of the rule, with 30 funeral homes voluntarily joining FROP. The sweeps method of enforcement of the Funeral Rule is ongoing and results from the 1997 nationwide sweeps will be finalized and announced 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 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; 202-326-3128; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC's News phone recording at 202-326-2710.