|
Washington Report
October 1999
Review of AARP, NFDA, FAMSA
Comments on FTC Funeral Rule
by Robert M. Fells, Esq., General Counsel
Following up on last month's review of public comments submitted to the Federal Trade Commission concerning the Funeral Rule, this month's column will focus on comments filed by some of the major organizations involved in the proceedings.
AARP (formerly known as the American Association of Retired Persons) submitted a series of surveys to support its position for expanding the Funeral Rule to cemeteries and other sellers.
A "Cemetery Mystery Shop" study reported that "66 percent of all shoppers in 1997/98 were not shown written price lists for cemetery products or services," in addition to other findings. However, AARP acknowledged that the study "is not quantitative research that allows us to generalize" or apply the results to other cemeteries. In fact, only 106 cemeteries were contacted for the study, and over half of them, 64, were shopped twice, thereby resulting in a possible distortion of the responses.
That said, some of the results are favorable to the industry, including the finding that "most salespersons provided price information on grave plots (98 percent) and costs associated with burial (83 percent) and other products and services...." In addition, the study found that "almost all shoppers (96 percent) left the cemetery visit with all of their questions answered" and "most shoppers (87 percent) did not feel any pressure" to buy. Only 5 percent reported experiencing "some pressure" and only 1 percent reported "a great deal of pressure." The chief criticism of the study focused on the use of written price lists.
AARP also submitted a telephone "Funeral and Burial Planners Survey 1999" conducted among approximately 2,600 individuals 50 years of age and older. Of this group, about 500 people "personally planned a funeral after someone died, preplanned and paid for a funeral in advance of need for someone, including possibly themselves, or both between January 1998 and June 1999. A total of 358 respondents purchased burial plots or burial goods and services during this same time period."
The telephone survey found that 36 percent of the lot purchasers, actually 73 people, were not given written or printed price lists when buying a burial plot. The survey did not state whether verbal price information was provided or whether the cemeteries involved were public, private, religious or municipal. This distinction is important because AARP advocates expansion of the Funeral Rule to all sellers of funeral goods and services, including nonprofit cemeteries.
The comments filed by the National Funeral Directors Association (NFDA), which has launched an intensive effort to bring cemeteries and other sellers under the Rule, included a survey of its membership where it asked, among other things, whether cemeteries "that you do business with require consumers to purchase goods and/or services only from the cemetery." Out of the 3,189 NFDA members responding, the results were almost evenly divided, with 49.6 percent indicating the existence of such restrictions. Though the number of cemeteries involved was not cited, the NFDA survey respondents claimed a variety of restrictions, some of which are unclear while others are legally permissible.
The NFDA comments use the survey results in an apparent attempt to equate itemized cemetery fees for specific services to the casket handling fee imposed by funeral homes when families buy the casket elsewhere. Since 1994, the FTC has prohibited funeral homes from imposing a separate casket handling fee; however, a non-declinable basic service fee is permitted under the Funeral Rule.
Comments by the Funeral and Memorial Societies of America (FAMSA) also urged expansion of the Rule to cemeteries and other sellers. FAMSA supported its position by citing 128 cemetery complaints it received over the last three years, of which about a dozen relate to "difficulty obtaining information." It is unclear what kind of information was being sought. Another two dozen related to vault and marker pricing, but again, the specific issues are unclear. About 45 of the cemetery complaints involved a variety of issues including "price increases for opening and closing services required for lots purchased at an earlier time."
At this point, a total of 150 comments have been received by the FTC's deadline of August 11th. The comments, without attachments or exhibits, may be viewed on line at www.ftc.gov/bcp/rulemaking/ funeral/comments/index.html. Interested parties will be invited to participate in a public workshop conference by the FTC in mid-November to discuss the issues under review in the Funeral Rule proceedings. ICFA members will be kept informed of developments.
Copyright ICFA 1999.
|
