|
Washington Report
August 1999
ICFA Files Comments on the FTC Funeral Rule
by Robert M. Fells, Esq., General Counsel
In response to the Federal Trade Commission request for public comments on the Funeral Rule, the ICFA has filed an extensive statement. Nearly 40 pages in length, the ICFA comments are supported by almost 20 exhibits, including many references to FTC Staff Reports and recommendations from previous Funeral Rule proceedings. The ICFA also submitted a number of studies and its own Model Guidelines for State Laws and Regulations to fully explore the issues under review. In addition, the association retained economics professor Ronald G.E. Smith, author of The Death Care Industries in the United States, to comment on the changing nature of the industries as it relates to the Funeral Rule.
The ICFA opposes the expansion of the Funeral Rule to cemeteries and other sellers in the absence of substantial evidence of widespread abuses by these sellers that are Funeral Rule-related. According to the association's comments, "While the ICFA is aware that some consumer complaints involving cemeteries may be brought to the attention of the FTC during this Funeral Rule proceeding, the key issue should focus on whether any of the problems, whether documented or alleged, would be prevented, remedied or otherwise addressed by the Funeral Rule.... Furthermore, such extension without a reasonable basis for finding actual widespread abuses would violate the FTC's own rules of procedure."
Among the 30 issues raised by the FTC for public comment, the commission has asked whether "non-traditional funeral providers" such as cemeteries and casket retailers should be subject only to certain provisions of the Funeral Rule. The ICFA pointed out that the Funeral Rule was enacted to prohibit certain types of abusive sales practices by sellers, not to regulate the types of products or services sold. Therefore, the critical focus should target sales practices, not items offered for sale.
The ICFA also discussed the jurisdictional issues involved in attempting to expand the Funeral Rule to cover cemeteries. According to the FTC Act, the FTC has authority over any company that is "organized to carry on business for its own profit or that of its members." Since most cemeteries in the United States operate as nonprofit entities, these organizations would appear to be exempt from coverage under the Funeral Rule in any event. The ICFA stated, "Due to these factors, extension of the Funeral Rule to the relatively small group of cemeteries remaining would be inconsistent, confusing to the public, and again demonstrates why the Rule is an inappropriate regulatory vehicle to apply to cemeteries."
Proponents of expanding the Funeral Rule to cemeteries have argued that funeral homes currently are at a "competitive disadvantage" and require a "level playing field" whereby their competitors are covered under the Rule. Addressing these arguments, the ICFA pointed out that "Of the sixteen funeral goods and funeral services listed in the Funeral Rule, only one item, outer burial containers, are commonly sold by both funeral homes and cemeteries.... The FTC staff was well aware, even in the 1970s, that funeral homes and cemeteries both commonly sold outer burial containers. This activity is neither 'a new development' nor has it been used by the Commission as justification for extending the Rule to anyone selling outer burial containers.... Moreover, funeral homes do not typically offer goods and services traditionally sold by cemeteries such as lots, columbarium niches for cremated remains, mausoleum crypts, markers and monuments, grave opening and closing services, or ancillary services relating to grave and marker installation and repair. This distinction is important in view of the claim advanced that all sellers are not competing on 'a level playing field.' Unfortunately, this allegation ignores the important fact that funeral homes and cemeteries function on two different playing fields, providing substantially different goods and services, sold at different points in time, under different contractual terms and conditions, to the public."
The ICFA comments also discussed the increase in cemeteries and retailers selling caskets to the public. In the absence of precise numbers, the association is under the impression that most casket sales are made by cemeteries already operating in tandem with a funeral home. Also, nearly one-third of the states prohibit casket sales by cemeteries. The association also commented on related issues such as whether preneed sales abuses are prevalent and the need to retain the nondeclinable basic services fee charged by funeral homes. ICFA members who would like a copy of the association's comments should call ICFA headquarters.
Copyright ICFA 1999.
|
