From the Memorial Business Journal, April 28, 2022
The Federal Trade Commission has filed suit against Funeral & Cremation Group of North America, Legacy Cremation Services (also doing business as Heritage Cremation Provider) and their owner, Anthony Joseph Damiano, for misrepresenting their location and prices, illegally threatening and failing to return cremated remains to consumers, and failing to provide disclosures required by the Funeral Rule.
The Department of Justice, on behalf of the FTC, is asking the court to stop violations of the FTC Act and the Funeral Rule and impose civil penalties on the defendants.
“We are very pleased to see the FTC and DOJ finally take this step,” said NFDA CEO Christine Pepper. “Over the past several years, NFDA has filed complaints against Heritage on behalf of its members with the FTC and the FBI office in Charlotte, North Carolina. Those complaints included background information on Heritage and its ownership, as well as detailed descriptions of the serious harm Heritage has caused grieving families.
“NFDA will continue to look out for its members, and all of funeral service, against unscrupulous operators,” she added.
Chris Farmer, NFDA general counsel, and Lesley Witter, senior vice president of advocacy, recently met with several high-level FTC staff to discuss a number of funeral service issues. According to Witter, the meeting was very positive, and FTC staff had numerous questions about NFDA’s position on the upcoming changes to the Funeral Rule. This meeting gave NFDA the opportunity to update staff, clarify association positions and explain how possible changes could impact NFDA members, as well as funeral service in general. NFDA also inquired about Heritage Cremation. Following the meeting, it was reported that the FTC had taken legal action against Heritage Cremation.
According to the complaint, the Colorado- and North Carolina-based Legacy Cremation Services, and Damiano misrepresented their location and prices in violation of Section 5 of the FTC Act and the Funeral Rule, charging people substantially higher prices than advertised. The company also used other business names, including Evergreen Funeral Home and Crematory, Carolina Central Crematory, Legacy Funeral Services, Families First Funeral Services and The Funeral Group.
The complaint alleges:
- Defendants falsely claim to be local providers. Defendants claim to operate local crematories or provide local cremation services on their websites and during phone calls with consumers. Defendants frequently fail to disclose that they attempt to arrange for services by third-party funeral providers unaffiliated with defendants. In some instances, the defendants are unable to locate a funeral provider in the location sought by the consumer and instead secure services in other locations (at times up to two hours away) without first consulting with the consumer, according to the complaint, and in those instances, consumers are forced to travel for viewings or to pick up their loved one’s remains, or have the remains shipped to them.
- Defendants serially charge more than their posted prices. Defendants routinely posted prices lower than consumers ultimately paid. The defendants also violated the Funeral Rule by failing to provide consumers with a statement including the total costs of the goods and services and failing to disclose that the prices they charge for cash advance items are higher than defendants’ costs for those items.
- Defendants hold hostage the remains of loved ones until consumers pay the higher prices. Damiano and his companies, in some instances, unfairly withheld or threatened to withhold cremated remains or information about the location of cremated remains from consumers who refused to pay previously undisclosed fees and higher prices.
“Preying on consumers when they are dealing with the loss of a loved one is outrageous, and it’s illegal,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to enforcing the Funeral Rule to protect both grieving consumers and honest funeral homes.”
Lesley Fair, a senior attorney with the FTC’s Bureau of Consumer Protection, noted that when looking to make arrangements after the loss of a loved one, many consumers start with an online search for providers in the deceased’s community. “Location is a key criteria so family members and friends can attend memorial services or viewings without traveling a long way,” she said. “The complaint uses the example of a person conducting an online search for cremation services in Abbeville, Alabama. When consumers click the defendants’ links, they’re taken to a page titled ‘Trusted Cremation Services in Abbeville’ that claims to offer ‘compassionate community service close to home.’”
This is what the page tells viewers, but according to the FTC, the defendants have optimized search results and designed landing pages to leave people with the false impression that they have a physical location or provide funeral or cremation services in that requested town and many others when, in fact,
they don’t.
The FTC says the defendants have also engaged in other practices that inflict injury on grieving loved ones. For example, Fair reported that if people call to ask if they’re a local business, the defendants have allegedly misled consumers either by claiming to be a local establishment or by saying that they work with crematories in the town in which consumers are seeking services. In fact, the complaint alleges that in many instances, the defendants contracted with third-party providers located an hour or more from the advertised town.
Furthermore, when consumers want to ascertain the location of their loved one’s remains, the FTC alleges that the defendants have often refused to give them the name and location of the third-party provider. The Heritage website does not inform consumers that Legacy, doing business as Heritage, is not a local crematory or funeral home, and that if consumers engage Legacy’s services, Legacy will attempt to locate a provider in the relevant area to perform the cremation services.
What’s more, the complaint cites the defendants’ customer service scripts that direct their employees not to provide that information until after the consumer has paid.
In the complaint, the FTC alleges how the defendants have deceived people regarding price. Fair said the gist is that despite express representations, such as “from $695” or quotes for “all-inclusive” packages, the defendants often pile on multiple fees and charges that substantially hike the final cost.
The complaint further alleges that the defendants’ response to many consumers who contested those charges was particularly egregious.
What happens when consumers balk at the increased price? Fair said the complaint cites three tactics the defendants have employed in response:
- They have withheld the death certificate.
- They have added even more charges if frustrated consumers decide to do business with another company.
- They have withheld the cremated remains of a consumer’s loved one unless and until the person paid the new, higher price.
In addition to alleging unfair and deceptive practices in violation of the FTC Act, the complaint charges the defendants with violating the Funeral Rule by:
- Failing to provide accurate price information over the phone
- Failing to provide statements of funeral goods and services that include the total cost
- Failing to reveal that the price charged for cash advance items wasn’t the cost to the defendants.
The complaint, which is pending in federal court in Florida, seeks a permanent injunction, civil penalties for violations of the Funeral Rule and monetary relief.
The Funeral Rule carries a potential civil penalty of up to $46,517 for each violation.
The FTC voted 4-0 to refer the civil penalty complaint to the Department of Justice for filing. The DOJ filed the complaint in the U.S. District Court for the Southern District of Florida.
This matter is being handled by trial attorneys Cody Matthew Herche and Wandaly Fernández García, along with Lisa K. Hsiao, assistant director of the Civil Division’s Consumer Protection Branch, and Assistant U.S. Attorney James A. Weinkle for the Southern District of Florida. Rebecca Plett and Thomas Harris represent the FTC.
NFDA will continue to meet and have discussions with the FTC on this and other topics of importance to its members.