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FTC Sweeps Funeral Homes to Check Compliance with
Consumer Law
Violations suspected in seven of twenty homes checked
in Nassau County, NY
Oct. 12, 2005 – Twenty funeral homes in Nassau
County, New York, received a surprise visit from Federal Trade
Commission staffers who were checking their compliance with the FTC
Funeral Rule. Seven of the homes appeared to be in violation, the agency
said today.
The FTC’s Funeral Rule requires that consumers be
given a copy of an itemized general price list, and that they be shown
itemized price lists for caskets and outer burial containers in a timely
manner. The Funeral Rule is designed to ensure that consumers making
funeral arrangements receive price lists and are informed that they can
buy only the goods and services they want or need.
FTC “test shoppers” visited the 20 funeral homes to
determine whether they were compliance The FTC’s Northeast Region Office
coordinated the sweep as part of an ongoing nationwide law enforcement
program.
According to the FTC, six of the funeral homes
considered to be in violation of the Rule will be allowed to resolve the
possible law violations by participating in the Funeral Rule Offenders
Program (FROP), in lieu of possible formal legal action, which could
result in an injunction and civil penalties.
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 Funeral Rule.
Under the program, funeral homes that fail to give
test shoppers the itemized price lists in the time and manner required
by the Rule are given the option of entering the FROP program rather
than face possible formal legal action. If they choose FROP, they make a
voluntary payment to the U.S. Treasury in lieu of civil penalties, and
enroll in a program, administered by the NFDA, that includes a review of
price lists, compliance training and follow-up testing and
certification.
Depending on the severity of the violation, funeral
homes considered to be in violation of the Rule may be allowed to
resolve law violations through means other than the FROP program or
formal law enforcement action that could result in an injunction and
civil penalties.
Among those alternative means of resolving possible
violations, a funeral home may receive a letter notifying it that it is
not in compliance with the Rule and warning that future noncompliance
could result in a monetary penalty. In this instance, the seventh
funeral home that appeared to be in violation received such a warning
letter.
The Funeral Rule, developed by the Commission in
1984, was revised in 1994. One of its key requirements is that funeral
homes must give consumers a copy of an itemized general price list,
which they can use for comparison shopping 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 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 titled, “Complying with the Funeral Rule,” provides
information to funeral providers on complying with the Rule.
Copies of the FTC brochure and other documents
pertaining to the FROP program are available from the FTC’s Web site at
http://www.ftc.gov and also from the FTC’s Consumer Response Center,
Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580 or call
toll-free: 1-877-FTC-HELP (1-877-382-4357).
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