| When Therese Taylor's mother died, she and her brothers went to a Texas funeral home to arrange for a cremation. They never expected to be asked to buy a casket and pay for embalming. "We were confused," Taylor says. "When we asked why we needed these things, the director acted as if we had committed blasphemy. 'Don't you think your mother deserves the best?' he asked." Fortunately, the family questioned these charges and finally settled on a special alternative container that cost $50, and no embalming. Despite their vigilance, they were never given a price list of services even though the funeral home was required by law to give them one. "There were a couple of charges on the final bill—'handling' and 'refrigeration' fees—that we didn't understand," says Taylor. "But by then we were too overwhelmed to argue, so we just paid them." Taylor's story is not uncommon. The death of a family member is one of the most difficult times that anyone can experience. As mourners face their grief and come to grips with their own mortality, they must also handle the business of a final farewell. Yet, according to several AARP research studies, some unscrupulous businesses in the "death-care industry" take advantage of consumers at this vulnerable moment. AARP investigations unearthed questionable practices in the industry, including false statements about the need for special caskets, withholding of required pricing data, deceptive marketing aimed at persuading consumers to buy higher priced services, and misstatements about the need for embalming and the use of grave liners. Currently, consumer groups—and Congress—are renewing their scrutiny of the funeral industry for several reasons. Not the least of which is to assess the impact that a handful of large public corporations is having on it as they buy up the mom-and-pop funeral homes that were once the norm. These corporations, beholden more to Wall Street than to local communities, have proved adept at marketing high-profit caskets and unnecessary services. Some of the most aggressive sales tactics, says Steven Sklar, director of the Office of Cemetery Oversight for the state of Maryland, are practiced by these conglomerates. While consumers are grappling with that problem, the cost of funeral-related products and services has risen and continues to rise—faster than the rate of inflation, according to consumer price index data collected since 1990 by the Bureau of Labor Statistics. Curiously, these rises are taking place in an industry where oversupply is a problem. There are some 27,000 funeral providers nationwide, according to the U.S. General Accounting Office (GAO), which averages out to six funerals a month for each funeral home. "Normally, when supplies increase, the prices go down," says Jerri Robinson, president of the North American Cemetery Regulators Association. "But in this industry, the prices don't drop. I think it's the public's willingness not to question it." Adding even more to the high cost of funeral services and products "is the fact that most consumers have no idea what they really need, or don't need," says Lee Norrgard, AARP lead investigative specialist, who has been studying the funeral industry for the past 14 years. (See How to Really Rest in Peace, below Both state and federal governments are supposed to be the consumer's watchdogs over the industry. Over the years, state governments have instituted their own rules—some good, some not so good. So in 1984 the federal government put into place the national Funeral Rule, which uniformly covers all the states. At the heart of the rule, which is enforced by the Federal Trade Commission (FTC), is a basic mandate: Make sure that the consumer gets accurate, itemized price information about a full range of funeral goods and services; don't sell the consumer unneeded products or services; and don't bill them for services they didn't receive. Late last year the GAO issued a report on how well the FTC is doing in its enforcement of the rule. Turns out, not so good. According to the GAO report, the FTC has no means in place to assure or measure funeral-home compliance with the rule. Worse, again according to the GAO, the FTC chose not to take action in more than half the violations it encountered. Then there's AARP's Funeral Rule Awareness Survey released earlier this year, which found few people outside the industry itself who are aware of the rule's existence. Only 8 percent of those surveyed knew that funeral homes are required to provide customers with a general price list. "The biggest weakness of the Funeral Rule is that families have no idea that it exists," says Mercedes Bern-Klug, who chairs the survey committee of the Funeral and Memorial Society of Greater Kansas City and who testified recently before the FTC about abuses in the funeral industry. Families may not know it exists, but the funeral industry does. Kelly Smith, public relations manager for the National Funeral Directors Association (NFDA), points out that test-shopping "sweeps" conducted in 1997 and 1998 by the FTC, state attorneys general, and volunteers found 90 percent of funeral homes in compliance with the Funeral Rule. But, says Adrienne Oleck, AARP business practices adviser, "Even if 10 percent of the funeral homes—which could be handling as much as 10 percent of the 2 million annual deaths in the U.S.—aren't complying, that represents a huge number of funeral homes." And, adds Jeffrey Kramer, AARP legislative representative, "AARP research figures show that it's probably more in the range of 25 to 30 percent not in compliance." Funeral industry compliance is important because consumers using these services are especially vulnerable. Most choose a funeral home that has served their family before, or was recommended by their church, or is located close to where they live. "Funeral directors are well aware that people don't shop around," says Lisa Carlson, director of the Funeral Consumers Alliance (FCA). "They're counting on it." Even when consumers are well-informed and take the time to shop, it's not always easy to find answers to simple questions. "It's like comparing apples and asparagus," says Bern-Klug, who also is a social-work researcher at the Center on Aging at the University of Kansas Medical Center. "One glaring example is the price of a graveside service. One funeral home charges $65 and another charges $2,770. But often there's no way of knowing if they're providing the same thing or completely different services." Several types of services that the AARP Survey and the GAO report found especially troublesome and confusing to consumers include pre-need contracts, casket purchases, cemetery sales, and monument prices. The Case For—and Against—Pre-Need In recent years, millions of consumers have chosen "pre-need" contracts—to the tune of $20 billion to $40 billion—which offer the comfort of prepaying costs so that the burden does not fall on the shoulders of those who survive them. "It's in everyone's best interests for consumers to prearrange," says David Shipper, president of the International Cemetery and Funeral Association, an industry trade group. But while consumer advocates acknowledge the value of advance planning, they caution that handing money over to a death-care provider, rather than investing or saving it, may be unwise. An AARP survey released last year regarding older Americans and pre-need funeral and burial arrangements found that one third of Americans 50 and older have prepaid some of their funeral or burial costs. Yet many of them did not know whether the money was invested, or where. Fraud, violation of fiduciary responsibility, and conflict of interest are among the problems documented in the management of prepaid funeral and burial funds. Other consumer complaints regarding prepaid plans: Prepaid caskets are reported as no longer available, and customers are told that to get a comparable one, they will have to pay more. Other problems were unearthed in AARP's for-profit cemetery "mystery shop," during which older consumers were paid to pose as customers and then report their experiences to AARP. Only 16 percent of them were given written prices and 19 percent were told where prepaid funds would be held. Only 15 percent of the cemeteries disclosed the terms of financing and even fewer explained cancellation and refund policies. A Tale Of Three Caskets Another area of concern is choosing a casket, usually the biggest-ticket item on the funeral bill. Caskets cost an average of nearly $2,200, according to a 1999 NFDA survey. While the FTC's Funeral Rule requires funeral homes to show customers the cost of caskets upfront, AARP's Planners Survey found that one third of those arranging for funerals were not given a price list for caskets before inspecting them. Consumer activists say that it is common in the industry for dealers to show a range of only three caskets, with people almost invariably choosing the middle-priced one. The least expensive caskets—disparagingly referred to as "welfare" caskets by some in the industry—may not be offered unless the consumer knows enough to ask. Indeed, independent dealers, such as California Casket Company owner Rob Karlin in Los Angeles, complain that funeral directors work against the spirit of the Funeral Rule by promising hefty discounts on their service fees if customers purchase the casket directly from the funeral home instead of from third parties that might charge significantly less. "They're saying, in effect, that if you don't purchase a casket from us, we'll charge you $1,000 more in service fees," says Karlin. He acknowledges that he and other independent retailers mark up their caskets 100 percent, yet Karlin says their prices are consistently lower than those at funeral homes. "The same casket that I sell for $1,500, they'll sell for $2,500 or $3,000," he says. A plain pine casket can be bought for around $300, and some are readily available via the Internet. (See E-Undertaker below) Another misleading sales tactic in the casket business, and one expressly forbidden by the FTC, is the claim that the use of "protective" metal caskets with rubber seals helps preserve the remains. AARP's Planners Survey found that one third of those making funeral arrangements were told this. The argument about preservation is also used to sell outer burial containers, grave liners, or vaults. AARP found that 29 percent of those buying a burial plot were falsely told that grave liners and burial vaults aid in preservation. "I don't know any cemetery professional who would make that claim," says ICFA's Shipper. "Certainly no one believes that." Some cemeteries do require outer burial containers—which can range in price from several hundred dollars to several thousand—in order to keep the ground from caving in over the casket. Even consumers who choose the more affordable option of cremation without viewing, as a growing number of Americans now do, may be pressured to buy a casket for the body on its trip to the crematory. Cemetery Free-For-All Cemeteries, which currently aren't covered under the Funeral Rule, have their own set of problems. Industry officials say they don't need FTC oversight because the number of reported complaints is low and they are quickly resolved, which state regulators say is true. But consumer advocates and the NFDA are pushing for all death-care providers to be covered by the FTC Funeral Rule, which is up for review. "I can't think of a state that doesn't have a problem with cemeteries," says Carolyn Jacobi, who has investigated cemeteries around the country on behalf of disgruntled families. "The problems go from fraudulent pre-need sales to lack of care and maintenance to violations of antitrust law." In addition to these problems, Sklar says he finds "very assertive marketing techniques and campaigns" targeted to people over 50 from the cemetery industry. One tactic regulators report is the sale of a package called "the veteran's special." A cemetery will offer a veteran a free plot. Once the veteran visits the cemetery, though, he's told that in order to get a double plot for his wife and himself, he'll have to pay for the spouse's plot. Then there's the additional cost of opening and closing each grave. "Before they know it, they're more than $3,000 into it," says Sklar. "And the cemeteries don't tell them they could get a free burial at a veterans cemetery with a very nominal charge for a spouse's adjoining plot." Monuments and Markups Prices for monuments and memorial markers also vary widely—often for the same product. In recent comments to the FTC, FCA director Carlson told the story of an event at a conference of morticians: "One [industry] sales coach suggested to dealers that they offer a one-foot-by-two-foot flat marker at $1,000 because most people won't know how much to expect and will get out their checkbooks. A retailer who was present was horrified; his normal price for such a marker is $395." Furthermore, Sklar contends that growing competition between cemeteries and funeral homes is harming consumers. Families that have already bought a casket from a cemetery are sometimes urged by competing funeral directors to cancel the contract and buy a cheaper casket from them, or vice versa. The NFDA's Smith counters that such intra-industry rivalry saves customers money. But Sklar and others say that such behavior demeans an experience that is already difficult. "In the name of the dollar, you've robbed them of what they came to get, which is a celebration of the memory of their loved one," he says. That, perhaps, is the most galling aspect of the industry's sometimes questionable methods. Consumers might expect aggressive sales tactics and borderline marketing campaigns when buying a used car. But, as Bern-Klug notes, "You don't walk into a funeral home like a consumer. You walk in like a grief-stricken family member.'' Many think the time has come to enforce at least the level of protections provided to used-car purchasers. Senator Chuck Grassley (R-Iowa), chairman of the Senate Special Committee on Aging, shares that opinion. His committee is taking a hard look at issues involving the entire death-care industry, and is scheduled to start hearings on industry abuses sometime this spring. "I've asked the FTC to explain what's going on," says Grassley. "We want to know how they can assure consumers of fair treatment when they walk into a funeral home. When they shell out thousands of dollars for a service, they should get what they pay for." Beth Baker is a freelance writer in the Washington, D.C., area. Karen Reyes is planning editor of MODERN MATURITY.
Death is such an unfortunate way to end a life. But there is at least one benefit: Dead men don't plan funerals. A funeral is often the third most expensive purchase a person makes in his or her lifetime—right behind a home and a car—and certainly the most unpleasant. You're grieving, you're distressed, you know nothing about the funeral industry, all of which makes you easy prey for unscrupulous funeral homes. To avoid getting swindled, follow these seven tips: 1. Shop Around The average funeral costs from $5,000 to $10,000. How much should it really cost? "If you do your homework, you should be able to find a complete funeral with a metal casket for as low as $2,000," says Father Henry Wasielewski, an Arizona priest and watchdog of the funeral industry. To find that price—the prices can vary wildly—you need to comparison shop. And when you visit the showroom, bring along a friend—someone who isn't grieving and won't be suckered by a high-pressure sales pitch. 2. Demand a Price List Funeral homes are required by federal law to provide written price lists for products and general services (such as consultations, music, and care of the body). But be prepared: Lower-priced items are often missing from the list. "You'll ask about a $500 casket and they'll say they don't carry it," says Darryl Roberts, author of the exposé Profits of Death and a 30-year veteran of the business. Some funeral homes prepare a variety of price lists. After probing you with questions—where you work, the car you drive—"They'll give you price list D," says Wasielewski, "which is $5,000 more than price list C." 3. Don't Feel Guilty Some funeral-home sales reps help you through your grief. Others simply cause grief. They're like used-car salesmen in better suits. Their job is to sell, and if they can get you crying, they can get you buying, usually with lines like, "This is the last thing you can do for your father." Wasielewski recalls his mother's death and the subtle manipulation a mortician used to arouse guilt: "He started with a high-end casket—though we certainly weren't high-income buyers—and recommended nothing short of a 50-year warranty. But if it was his mother, he'd buy the 75-year warranty." 4. Know Your Caskets Will a high-priced casket preserve your loved one's body? Not hardly. Some supposedly airtight caskets may actually speed up the deterioration process by building up gases that decompose the body (grave liners and vaults won't protect the body either). It's the body's acids and chemicals that destroy a casket, says Wasielewski, and higher-priced bronze and copper models are no more protective than stainless steel. Pine caskets are also a cheaper alternative, but they're rarely on display. "Most funeral homes put the less expensive models in the basement," says R. E. Markin, author of The Affordable Funeral. "Or they paint them an odd color—anything to make them look cheap." 5. Buy Online A 1999 report by the New York City Department of Consumer Affairs found that some funeral homes mark up caskets by as much as 300 percent. Your best option? Try buying online or from a wholesaler. The New York City investigation found that Direct Casket, an independent casket company, sold some caskets for $2,000 less—for the same model—than certain funeral homes. Be prepared, however: Funeral homes are rarely thrilled when you buy elsewhere and may levy a service charge, although the practice is prohibited by the Federal Trade Commission. 6. Keep it Simple You don't need a fancy funeral to honor a loved one. To save money, Alexandra K. Mosca, director of the Hellenic Funeral Home in Queens, New York, suggests limiting visitation periods to one day instead of two, and dressing the deceased in a favorite outfit instead of costly burial clothing. Direct burial or cremation is another option (taking the body directly to the crematory or cemetery with no preparation or services). "Cremation costs about one third less than a grave opening," says Mosca. Hosting memorial services at your home or church can also lead to savings. And although some funeral homes require embalming if there will be a viewing, embalming is not necessary if the body is immediately buried or cremated. "Eliminating embalming can save $500 to $900," says Roberts. 7. Plan Ahead If you want a simple funeral, say so now. Your family will feel less pressure to buy you a designer casket when you're gone. Many funeral homes and cemeteries offer prepay plans—they're supposed to save your kids from financing your funeral—but you rarely control the money, and essential services are often left off the contract. A better alternative is to set up a trust fund or invest the money on your own. "That way," says Markin, "you and your family control the money." You can do just about anything on the Web these days—including planning a funeral, buying a casket, and even arranging for a perpetual memorial. (Note: The FTC requires mortuaries and funeral homes to accept caskets, urns, and any other burial product requested by the client without charging a handling fee.)
These Web sites are for information only; their publication is not an endorsement by AARP or MODERN MATURITY. 
|
