The Federal Trade Commission (FTC) is the government entity that oversees The Funeral Rule. This is a set of rules designed to protect funeral consumers that has been in place for about 30 years. They issued some opinions interpreting the rules.
Plus, learn more from the National Funeral Director’s Association (NFDA) about how funeral homes may impose credit card surcharges starting on January 27.
So, what are the Funeral Rule updates? Here’s the info from the NFDA:
Opinion No. 12-1. This opinion, which is the only Funeral Rule Advisory Opinion issued by the FTC Staff in 2012, clarifies which caskets must be listed on a funeral home’s Casket Price List. Specifically, the question concerned whether a funeral home that wished to test-market a casket to select consumers could leave the casket off of its Casket Price List.
The opinion quoted the FTC’s “Complying With the Funeral Rule” manual, which holds that those caskets usually offered by the funeral home for sale that do not require special ordering must be listed on the Casket Price List. In this case, since the test-market caskets were offered for sale and did not require special ordering, the opinion concluded that they must be on the Casket Price List. Without this requirement, the opinion stressed that funeral homes could limit the availability of less expensive caskets by offering them only to consumers with limited means.
Translation: Cheaper caskets might be available than what you see in the showroom. Ask!
Opinion No. 13-1. In this opinion, the FTC Staff addressed the issues of whether funeral homes may charge extra for handling obesity cases or using additional personnel for very large funeral services. In both cases, the opinion found that these charges are permissible as long as they are listed on the General Price List and provide enough information so that consumers can determine when the additional fees would be imposed.
Translation: The families of obese people may have to pay more for funerals.
Opinion No. 13-02. This opinion also concerned the issue of additional fees that some funeral homes charge for special services. In this case, the issue was whether funeral homes may charge additional fees to process assigned insurance policies or charge consumers any fees that the funeral home pays to third parties to process insurance claims. In both cases, the FTC opinion concluded that as long as the consumers are given payment options and the options (together with any applicable fees) are explained on the General Price List, the fees are permissible under the Funeral Rule.
Translation: When financing a funeral using life insurance proceeds, the funeral home may recover third-party processing fees by charging you, the customer. However, you must be given payment options and a clear explanation of the transactions.
Opinion No. 11-1. This opinion, which was originally issued December 21, 2011, addressed the issue of charging a separate fee for identification prior to cremation when state law does not require identification. The FTC Staff advised in the original opinion that a funeral home could not require the purchase of identification prior to final disposition unless a state law or a crematory requirement mandated the identification.
NFDA immediately requested the FTC Staff to reconsider the opinion. They pointed out that the opinion is wrong in concluding that identification is not a practical necessity. Every credible expert in the industry advises that a funeral home that fails to require identification of the remains prior to cremation is negligent and will be held liable if the failure to identify results in a wrongful cremation.
Translation: NFDA advises funeral homes (which have different regulations in different states) to do the following:
If your funeral home is located in a state that requires identification prior to cremation, you may charge a separate identification fee that would apply prior to any cremation. You may also include identification as a service in your direct cremation and immediate burial listings.
If your funeral home is in a state that does not require identification, but the crematory you utilize requires identification prior to cremation, you may charge a separate fee for identification prior to cremation. You may also include identification in the direct cremation and immediate burial listings on the General Price List.
If your funeral home is located in a state that does not require identification prior to cremation and the crematory your funeral home utilizes does not require identification prior to cremation, then your General Price List should not contain a separate charge for identification prior to cremation. However, your funeral home may include identification in the direct cremation and immediate burial listings. The identification would be part of the basic services fee that is incorporated into the direct cremation and immediate burial services.