Tag Archives: Funeral Rule

Ellen Bethea at her home in Jacksonville, Fla. After her husband died, she paid $7,000 for her husband's cremation and funeral. She was unaware that the same company offered the same cremation services for much less.

Photo: Laura Heald for NPR

A Funeral May Cost You Thousands Less Just By Crossing The Street

Ellen Bethea at her home in Jacksonville, Fla. After her husband died, she paid $7,000 for her husband’s cremation and funeral. She was unaware that the same company offered the same cremation services for much less.

Photo: Laura Heald for NPR


This story is part one of a two-part investigation. Read part two here.

Story By Riley Beggin of NPR

Ellen Bethea sat alongside her husband’s hospital bed after doctors told her that Archie, the man she had been married to for almost five decades, wouldn’t make it.

“As soon as everybody else was asleep and I was sitting there with him, he passed on,” she remembers. “So I think he kind of waited for me to be with him.”

Bethea says her husband had several health problems and died of liver disease.

Later that day in November 2015, the staff at the hospital near her Jacksonville, Fla., home asked Bethea something she hadn’t prepared for: Which funeral home did she want to use?

Bethea had never planned a funeral before, but knew of only one in town — Hardage-Giddens Funeral Home of Jacksonville. Some of her family and friends had used it and, she said, it had a good reputation. She and her family went there the next day.

After meeting with a staff member, they walked out with a bill of over $7,000.

Bethea provided a copy of the itemized funeral bill to NPR. One thing quickly stood out, but only if you know something about Jacksonville’s funeral market.

The cost of Archie’s cremation — $3,295 — was more than twice the amount charged elsewhere in Jacksonville by the company that owns Hardage-Giddens. The cremations are done in the same place and in the same way.

In a months-long investigation into pricing and marketing in the funeral business, also known as the death care industry, NPR spoke with funeral directors, consumers and regulators. We collected price information from around the country and visited providers. We found a confusing, unhelpful system that seems designed to be impenetrable by average consumers, who must make costly decisions at a time of grief and financial stress.

Funeral homes often aren’t forthcoming about how much things cost, or embed the information in elaborate package deals that can drive up the price of saying goodbye to loved ones.

Ellen Bethea holds a picture of herself and her late husband, Archie. Photo: Laura Heald for NPR

Ellen Bethea holds a picture of herself and her late husband, Archie.
Photo: Laura Heald for NPR

While most funeral businesses have websites, most omit prices from the sites, making it more difficult for families to compare prices or shop around. NPR reporters also found it difficult to get prices from many funeral homes, and federal regulators routinely find the homes violating a law that requires price disclosures.

In Jacksonville, Hardage-Giddens and several other businesses in and around Jacksonville are part of a large, corporate-owned portfolio of about 1,500 funeral homes and several hundred cemeteries.

The owner and operator is Service Corporation International (SCI), a multibillion-dollar company traded on the New York Stock Exchange.

The Houston-based firm claims 16 percent of the $19 billion North American death care market, which includes the U.S. and Canada. Company documents say it has 24,000 employees and is the largest owner of funeral homes and cemeteries in the world.

In Jacksonville, SCI sells cremations under the Hardage-Giddens/Dignity Memorial brand at large, luxurious funeral homes.

The company also sells them for lower prices at strip-mall storefront outlets under other brands such as Neptune Society and National Cremation Society.

In communities around the country, it’s common to find wide swings in prices for funeral services.

“That to me, starts to cross a line into consumer deception,” says Joshua Slocum, executive director of the Funeral Consumers Alliance, a death care industry watchdog group based in Burlington, Vt.

Slocum was talking generally about markets such as Jacksonville, where a company’s centralized crematory handles remains from a variety of differently branded outlets — from posh funeral homes to humble storefront cremation societies.

The cremations are all the same, but some will cost much more than others, depending on where the consumer made the arrangements, and which of the company’s brand names appears on the invoice.

“You only get that lower price for the cremation society if you happen to know that it exists and is owned by the same business,” Slocum says. “I’m not saying they’re doing something illegal, but I am questioning whether or not we can really say, ‘Oh, they give a much higher level of service.’ ”

The front of 517 Park St., a crematory that serves multiple funeral homes. The building is located between downtown Jacksonville and the Riverside neighborhood. Laura Heald for NPR

The front of 517 Park St., a crematory that serves multiple funeral homes. The building is located between downtown Jacksonville and the Riverside neighborhood.
Photo: Laura Heald for NPR

The cremations arranged through all those outlets are performed in a large crematory at 517 Park St. in Jacksonville. The crematory’s supervisor, Troy Brown, wrote on his LinkedIn profile that the Park Street facility serves 14 funeral homes.

“Direct cremation is the same no matter where you go,” says Slocum. “When we’re talking about situations where some consumers do not know or can’t find out that that same business offers the same service at a lower price, maybe at a similar location, that is when I would have a problem with it.”

But Scott Gilligan, a lawyer for the National Funeral Directors Association, says comparing the two cremations is “like saying all weddings are the same.”

“Just like if I want a hamburger at a gourmet place, it’s the same hamburger I’m going to get at McDonald’s. But it’s going to cost more because of the atmosphere, because of what is being done. It’s choices,” Gilligan says.

According to Gilligan, when consumers choose a funeral home, they’re generally not making that decision on price. They’re looking at other factors, such as reputation and location.

When it comes to identical services, such as Jacksonville’s cremations, which have different brand names and different prices, Gilligan says: “Well, that is simply someone offering a service, or offering a division, which is going to cater to people who are looking for the price.”

One thing the storefront and the larger funeral homes have in common is an upselling strategy. Both try to sell consumers packages that bundle together multiple goods and services. This makes all of the funerals more expensive.

Bethea says it happened to her.

“Well, actually, I think they only showed us one package that they had,” she says.

Ellen Bethea and her great-grandson, Lucas, look at a painting of her late husband, Archie. Photo: Laura Heald for NPR

Ellen Bethea and her great-grandson, Lucas, look at a painting of her late husband, Archie.
Photo: Laura Heald for NPR

 

That package, known as the Honor Cremation Service, included a number of extra charges, including $495 for stationery and $345 for an Internet memorial.

That price premium is a problem the federal government has tried to fix with “the Funeral Rule,” a regulation in place since 1984.

It requires itemized price lists. But funeral directors are still free to emphasize packages in the sales process, as they did with Bethea.

“You know, Archie didn’t have hardly very much life insurance — maybe 5,000 — and I had, you know, a little bit of money in the bank, and it took everything.”

SCI, whose officials declined to speak with NPR for this story, tells consumers in sales materials that buying a funeral package saves them money.

But company executives tell investors a different story. In a presentation to Wall Street investors last year, the company said consumers spend an extra $1,900, on average when they buy a package, versus an “a la carte” funeral.

For some context, the national median cost of a funeral with a burial, not including cemetery costs, is over $7,000.

SCI CEO Tom Ryan told investors: “Think about society today. We are in a hurry, right? Everybody is on the clock … What we find is when we deliver these packages, people tend to spend more money because they’re buying more products and services.”

He added that consumers, in fact, like the packages.

“And most importantly, we survey our customers, and the highest customer satisfaction scores come from people that select the packages. So we know we’re doing the right thing. The packages allow us to do that for all parties involved,” Ryan said.

Company executives told analysts in July they’re rolling out a new point-of-sale system that also increases per-funeral revenue.

Packaging goods and services under multiple brands and setting different prices for identical services are strategies the company uses in many of its markets, which span 45 states and the District of Columbia.

In Raleigh, N.C., for example, the company’s full service funeral home and storefront cremation office are across the street from each other. Crossing that street can save you — or cost you — $1,895.

By Riley Beggin of NPR, Brian Latimer and Emily Siner of Nashville Public Radio, Joe Wertz of StateImpact Oklahoma and Ed Williams of KUNM contributed to this story.

View the original story along with its extras at NPR.

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Cremation Not Included: FCA Study Reveals All

When a loved one passes away, those tasked with arranging funerals and settling estates have to make a multitude of decisions during a stressful time and on a deadline. Cremation? Burial? Embalming? Organ Donation? The possibilities are endless and the choices made often have a lasting effect and although we try to make the most informed decision possible, no one really knows all the questions to ask. So when the Federal Trade Commission created the Funeral Rule in 1984, which requires funeral homes and providers to disclose all their disposition option,rates and pricing on a General Price List, consumers were reassured and confident their rights were being protected. But when a funeral home falsifies or fails to disclose important pricing information, what happens?

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On September 12 the Consumer Federation of America’s Executive Director  Stephen Brobeck and Josh Slocum, the Executive Director of the Funeral Consumer Alliance held a teleconference following the spontaneous release of an in-depth study on the cost of dying, with a special report on the cost of simple cremation, in America. The results were nothing short of surprising.

The CFA and FCA investigated 142 funeral homes in the top ten metropolitan cities in America including Atlanta, Denver, D.C., Indianapolis, Minneapolis, Philadelphia, Princeton, Seattle, Southern California, and Tucson. They examined the General Price Lists disclosed by the homes, compared them to the actual fees charged, as well as the practices and services provided and found a substantial difference in cremation pricing and blatant exploitation of a loophole revealed in the Funeral Rule laws.

Of 142 funeral homes and cremation businesses surveyed:

—prices for Direct Cremation ranged from $495 to $7,595.

— 33 of funeral homes failed to list legally required options and disclosures on their general price lists. This is a direct violation of the Funeral Rule.

—Of the 46 funeral homes that post Direct Cremation prices on their websites, 12 (26%) failed to offer these options and disclosures. If the Funeral Rule applied to websites, these would be in violation.

—Thirty-one of the surveyed funeral homes (22%) advertised a price for their Direct Cremation package that failed to include the cost of the cremation process itself, making the price for a simple cremation seem artificially low. Though this is not a direct violation of the Funeral Rule, it is inherently deceptive and the FTC should bar this practice.

According to the report, the Funeral Rule requires funeral homes to provide two options when selecting cremation as the chosen means of final disposition:

“The price of Direct Cremation when the customer supplies their own casket or cardboard “alternative container” to hold the body prior to cremation, such as a homemade casket or a container bought from a third-party retailer,”

And

“The price of Direct Cremation when the customer buys the funeral home’s least expensive alternative container.”

But of the 142 funeral homes investigated, 23% of them failed to list the legally required service options which is a direct violation of the Funeral Rule. In addition, the advertised prices for a simple cremation and the actual cost differed $200, at least, and $595 at most. With the cost of cremation not included in the GPL, low and middle-income consumers were at risk being blindsided by the exorbitant fees and unable to afford even the most simple method of disposition.

Olu Eletu |Unsplash|

Since the services provided with a simple cremation does not vary between one funeral home and another, the prices and the differences did not add up. A Direct Cremation consists of picking up and transporting the body, filing paperwork, and returning the ashes to the family. There are no ceremonies included, no casket, and no ornamental urn aside from the basic container when a direct or simple cremation is chosen and yet, prices could vary as much as 200 percent for the same service in the same city, according to the report. While many funeral homes use third-party crematories, as they do not have their own, these crematories charge somewhere between $250 and $400 for a cremation, pointing to a large discrepancy in ethical practices and pricing. But if the 2012, 2013 and 2014 lawsuits filed against a NY, Montgomery and D.C. funeral home by the FTC are any indication, the people will soon have their justice.

The full report can be accessed here.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).

The FTC educates and provides comprehensive guidance services to businesses and consumers in how to comply. For more information read Shopping for Funeral Services, Paying Final Respects:  Your Rights When Buying Funeral Goods and Services, and Complying with the Funeral Rule.