The role of funeral professionals is a challenging one. It goes beyond logistical planning. They guide grieving families through difficult decisions in unfamiliar territory, while honoring the deceased’s wishes with care and empathy. However, the industry faces ongoing scrutiny over discrepancies involving hidden fees and inconsistent cost practices. Addressing ethical issues in funeral pricing and service transparency is crucial for funeral directors striving to build and maintain trust and credibility.
Related CE course for funeral professionals: Marketing Within Your Community
FTC funeral rule
For most deaths in the United States, the funeral industry is unavoidable. To protect consumers during these emotional times, the Federal Trade Commission (FTC) introduced the Funeral Rule in 1984.
Before the establishment of the FTC Funeral Rule, mourners faced not only a difficult time coping with the loss of a loved one but also encountered challenges when making choices regarding funeral arrangements.
A lack of requirement for price disclosure enabled funeral homes to design packages, obscuring prices and often including elements customers didn’t want. This led to consumer confusion and an inability to make informed decisions among individuals who were already in a state of distress and vulnerability.
The FTC periodically evaluates the rule, which it last updated in 1994. The Funeral Rule is currently under review. However, as of today, the FTC hasn’t announced any changes. The FTC also conducts annual undercover inspections to ensure that funeral homes comply with regulations.
Funeral rule requirements
The Funeral Rule exists to protect consumers’ rights. While various American states have additional rules and regulations, all funeral homes are required to adhere to federal law.
The Funeral Rule addresses pricing transparency and other deceptive and unfair practices, including misleading claims, such as stipulating that crematories require a traditional casket.
Related CE courses for funeral directors: The Funeral Rule
General Price List (GPL)
Funeral homes and service providers must provide a General Price List (GPL) for any inquiries regarding goods or services, whether in person or by telephone. If discussing pre-need services, a separate GPL may be required.
Information on the GPL must include identifying information and a breakdown of all costs, such as caskets, embalming, and transfer of remains to the funeral home. Any additional services the funeral home provides, such as direct cremations, must be included in the GPL.
Information required on GPL
The General Price List must be typed or printed and include the caption “General Price List” along with the date of effectiveness. Other required information consists of the identifying details of the funeral provider, such as name, address, and contact number.
Statement of goods
The Statement outlines a detailed list of goods, services, and costs for a particular individual’s chosen funeral. The Statement allows consumers to review their choices without pressure at the funeral home and carry out a price comparison with other funeral providers.
Ethical guidelines of the funeral rule
The Funeral Rule protects consumers by serving as a key framework of ethical guidelines, with transparent pricing as a key obligation. Mourners rely on funeral professionals to convey clear and honest communication, passing on accurate information that enables them to make informed decisions.
Promoting transparency helps combat misleading practices by making funeral providers accountable for deception. For example, claiming that embalming is a legal requirement when it is not is a violation of the Funeral Rule, and funeral providers are liable for any deception. There are occasions when embalming may be required, such as international travel or a delay in burial or cremation.
Violations of the FTC funeral rule
The Federal Trade Commission employs several investigative methods to ensure that funeral providers comply with applicable rules and regulations, including,
- They conduct undercover inspections.
- Analyze customer complaints to check on funeral providers.
- Undercover telephone calls.
Between February 2023 and December 2023, the Federal Trade Commission carried out its first Funeral Rule phone sweep. Staff contacted and then reviewed a random selection of calls made to 278 funeral providers ranging in size and location. Staff made calls during and outside business hours related to funeral pricing details, with a focus on direct cremation services, including cremation with a memorial service and cremation with a viewing.
The FTC investigations revealed that several “funeral homes either refused to answer questions about pricing at all or provided inconsistent pricing for identical services.” (Federal Trade Commission, January 25, 2024)
Additional inconsistencies involved misleading claims about local health regulations, such as incorrect statements that embalming was mandatory. Other issues included one funeral home sending a package price list, which failed to meet the Funeral Rule’s stipulation for an itemised breakdown of costs.
Funeral rule offenders’ program
When the Funeral Rule took effect in 1984, the FTC’s only option to pursue violations was through the court system, an extremely costly, time-consuming, and largely ineffective route.
Almost 90% of funeral homes are small, independent enterprises. A costly court case, with penalties per violation reaching $50,120, would be detrimental to most of the industry’s funeral providers.
In 1996, the FTC implemented non-legal action through the Funeral Rule Offenders Program (FROP). The NFDA administers the program but doesn’t determine which funeral homes are eligible for the course. Only the FTC makes that decision.
“Funeral homes choosing to enroll in FROP must make voluntary payments to the U.S. Treasury and/or the state attorney general’s office equal to 0.8% of average annual gross sales.” (NFDA, January 22, 2024)
Enrolled funeral businesses must agree to several terms and conditions.
- Review price lists
- Write a Price Information Distribution Policy, which is an agreement between the NFDA and the funeral home, distributed to all employees involved in selling goods and services
- Training programs for all staff members
- Annual certification
Best practices for ethical pricing and service transparency
To strengthen a funeral home’s reputation and foster consumer trust, professionals should strive to go beyond merely complying with the Funeral Rule. This could include actively addressing ethical issues in pricing and service transparency, as well as embedding best practices into the core of their operations. Additional measures could involve:
- Publishing prices online. Although the FTC does not currently require this practice, it is one they are considering. Preempting this inclusion would show a commitment to openness.
- Provide staff training. Continuing education for employees enables them to stay current with industry trends and regulations, enhances their skills, and boosts their confidence and expertise.
- Respect cultural and economic diversity. Ethical funeral professionals should be able to understand and meet the diverse wishes of various cultural groups, as well as accommodate budget constraints. Demonstrating knowledge and flexibility in the range of services offered reflects awareness, sensitivity, and respect for a family’s needs.
- Encourage pre-planning. Promoting pre-planning removes emotional distress in decision-making at a vulnerable time in life. However, full disclosure of costs, cancellation policies, and plan amendments is paramount to overcoming consumer skepticism of pre-need funeral plans.
- Community engagement. Engaging with the community helps to connect with individuals and nurture meaningful relationships. It allows people to see funeral professionals as individuals who genuinely care and are compassionate.
