Home | Business News | Browse by Publication | J | Journal of Consumer Affairs

Consumer awareness of the legal obligations of funeral providers.

Article Excerpt
The results from a consumer survey that examined consumer knowledge of some parameters of the Funeral Rule are presented. Currently, all funeral home activities are regulated under the Funeral Industry Practices Rule of the Federal Trade Commission. The rule is premised on the assumption that it is difficult for consumers to make careful, informed purchase decisions in at-need situations because of emotional stress, time pressure, and lack of familiarity with available goods and services. However, limited research has assessed how much consumers know about the legal obligations of funeral providers as provided for by the Funeral Rule. Implications for consumer protection and policy are discussed.

**********

For the majority of consumers, the purchase of a funeral and its related merchandise will comprise the third-largest expenditure they will make in their lifetime, following the purchase of a house and an automobile (Consumers Union 2004). The average cost of a funeral, including burial, exceeds $8,500 (National Funeral Directors Association 2004).

Given the expense as well as a funeral consumer's vulnerability, the industry is regulated at the state and federal levels. Currently, all funeral home activities are regulated by the Federal Trade Commission (FTC) under the Funeral Industry Practices Rule, known as the "Funeral Rule" (16 CFR Part 453). The rule is premised on the assumption that careful, informed purchase decisions in this expensive product category are difficult for consumers because of emotional stress, time pressure, and lack of familiarity with the available goods and services. Based on these assumptions, the Funeral Rule prohibits funeral homes from certain practices and compels them to perform others.

Many consumer groups have made information available to consumers regarding end-of-life planning, encouraging them to plan ahead as well as informing them about their legal rights (AARP 1995; Funeral Consumers Alliance 2006). However, it is unclear whether consumers of end-of-life products and services are aware of existing consumer protections. Very little research has assessed how much consumers know about what funeral homes are obligated to do or prohibited from doing (Kopp and Kemp 2007).

In this article, we assess consumers' knowledge regarding the legal obligations of funeral home providers as mandated by the Funeral Rule. First, we provide a brief overview of the legislative climate of the funeral industry spanning the past century. Decades of criticism of the industry ultimately led to the current federal legislation. Next, we describe a survey that measured consumers' knowledge about what funeral homes can and cannot do. We then examine the data from the survey and the relationships among the demographic variables and respondents' objective and subjective knowledge about funeral products and services. Finally, we discuss the implications of the results for consumer protection and public policy.

CONSUMER PROTECTION IN THE FUNERAL INDUSTRY

Along with the origin and growth of the funeral industry in the late 19th century came observations that the funeral ritual was needlessly expensive (Cohen 1978; U.S. Department of Labor 1928). Funeral directors allegedly discouraged many individuals from immediately burying or cremating the body (Cohen 1978). In the 1930s, funeral planning (or "memorial") societies were created, which reduced consumers' funeral costs through cooperative buying power (Funeral Consumers Alliance 2006). The expressed need for help for funeral consumers extended into the mid-20th century (Davidson 1951; Mitford 1963; Touley 1961).

Several writers were especially critical of the funeral industry and its dealings with consumers (Bowman 1959; Harmer 1963; Mitford 1963; Morgan 1962), accusing funeral home directors of manipulative and unethical behaviors. A U.S. Senate hearing in 1964 brought complaints to the level of federal regulatory consideration (Subcommittee on Antitrust and Monopoly 1964). Twenty years later, after considerable examination of industry practices by the FTC (1974, 1975), the Funeral Rule (16 CFR Part 453) was enacted.

The primary assumption underlying the Funeral Rule is that consumers may be precluded from making careful and informed purchase decisions about funerary merchandise because of emotional stress, time pressure, and lack of familiarity with the available products and services. Thus, the Funeral Rule prohibits funeral homes from certain practices and requires them to perform others (see Exhibit 1).

EXHIBIT 1 Provisions of the Funeral Rule Specifically, the Funeral Rule prohibits: * Misrepresenting that embalming is legally required or necessary (when it is not). * Misrepresenting that a casket is required for direct cremation. * Misrepresenting that any funeral goods or services have protective or preservative abilities (when they do not). * Embalming without consent. * Subjecting consumers to "tying" arrangements, which require purchase of any funeral good or service as a condition of purchasing any other good or service. The Funeral Rule asserts that: * Consumers have the right (with some exceptions) to choose the funeral goods and services they want. * Funeral providers must state this fight in writing on the general price list. If state or local law requires the purchase of any particular item, the...