In my service providing legal counsel to NFDA Members I've spoken with funeral homes who have expressed concern over getting paid for preliminary services. Here is a scenario that may be familiar in your own business, of which I can assist with a simple solution.
An adult child telephones the funeral home and informs the funeral director that his mother has died at a local nursing home. He authorizes the funeral home to remove and embalm the remains. He then sets up an appointment to meet the funeral director the following day to make arrangements.
Prior to the arrangement conference, the family telephones the funeral home and informs the funeral director that they will be using the funeral home down the street for services. They also indicate that the successor funeral home is sending over a service van to pick up the remains.
At this point, the funeral home has very little leverage in collecting for the removal and embalming services that it has already provided. In most states, if the funeral home refuses to turn over a body until it has been paid for the removal and embalming, it would be guilty of unprofessional conduct. The funeral home does have an oral agreement with the adult child who originally authorized the removal, but it could be difficult to prove that there was a binding contract for a definitive price. The funeral home could also sue the estate for services rendered, but the time and cost of bringing such a claim is going to quickly offset the value of any recovery.
This dilemma of providing removal and body preparation services before entering into a written agreement and receiving payment has always been an issue for funeral homes. But in today’s environment, with price shoppers, dysfunctional families, and increased cremation, for many funeral homes it has become a significant drag on their bottom lines. What can a funeral home do?
In most cases, it is not feasible to meet in-person with surviving family members prior to removing the remains from the place of death. If a decedent died in a residence, a nursing home, or a hospital, there is an immediate urgency to have the remains picked up by the funeral home. Additionally, the sooner after death that body preparation and embalming occur, generally the better the results. Therefore, in most cases, it will not be possible to conduct a funeral arrangement conference prior to bringing the decedent into the care of the funeral home.
However, funeral homes can take advantage of the internet, credit cards, e-mail, and faxes to obtain a written agreement to perform preliminary services prior to undertaking a removal. When a family member makes that first call, the funeral director can explain that the funeral home needs written authorization to do the removal and preparation/embalming, plus payment for those preliminary services.
I’ve created an NFDA form entitled “Agreement to Purchase Preliminary Services.” It not only includes authorization for removal, preparation and embalming, it also provides for payment of those services by credit card. As soon as a funeral home receives the first call, it should e-mail or fax the Agreement to Purchase Preliminary Services to the family member and explain that it requires a signed copy of the Agreement prior to providing services. The funeral home could also place this agreement form on its website so that consumers could download or electronically sign it and transmit it back to the funeral home.
The primary advantage of the Agreement to Purchase Preliminary Services is that it provides for payment by credit card prior to the funeral home delivering services. This will enable the funeral home to get paid for the services it has provided even if the family decides to switch to another funeral home. Moreover, it may make the family less willing to transfer services to another funeral home if it knows that one of its members has already paid for services.
As far as compliance with the FTC Funeral Rule, the Agreement to Purchase Preliminary Services has the itemization and mandatory disclosures required to appear on the Statement of Funeral Goods and Services Selected. Since there is no face-to-face discussion with a consumer, a General Price List would not have to be provided. Of course, the funeral home may want to e-mail or fax a GPL to the family member or post it on its website. But, until an in-person funeral arrangement takes place, a GPL need not be given out under the current version of the Funeral Rule.
The Agreement to Purchase Preliminary Services is one of over 270 legal and compliance forms that NFDA provides at no cost as a member benefit. The form can be found in the Insurance and Financial Form section of NFDA’s online Legal and Compliance Forms.
T. Scott Gilligan, NFDA General Counsel