By Chris Farmer, NFDA General Counsel

We want to make sure you are up to date on the latest with the FTC’s review of the Funeral Rule. This article will provide you the background on the FTC’s review, what NFDA’s responses will be, and what you can do to help. 

In short, NFDA always has the best interest of our members in mind when we review and comment on federal changes that may impact your business. NFDA’s position is first and foremost that we completely support transparency in pricing and want funeral consumers to know exactly what they are getting and how much it costs. However, we believe that the Commission should not double down on the inadequacies of the Rule by increasing regulation and making revisions when they are not warranted; the legal burden to revise the rule has not been met and the suggested changes would not further affect the intent of the rule.

That being said, we also believe that it appears to be a foregone conclusion that the FTC intends to institute new rules regarding the issues they have presented. We believe that if NFDA doesn’t provide recommendations on how these revisions could be reasonably instituted, the FTC will proceed without our input and the resulting rules would be extremely onerous. 

Therefore, it is important that we suggest changes to the Rule that would address the FTC and consumer group’ concerns, while simultaneously providing clarity and guidance for funeral service professionals. We believe, if our recommendations are accepted, we will be able to gain a significant win for funeral service by clarifying and narrowing the trigger for when price lists must be provided.

Please review the recommendations that NFDA will be submitting to the FTC on behalf of you, our valued members, and make sure to act to make sure your voice is heard!

NFDA Member Call to Action

While NFDA will be submitting comments to the FTC on behalf of the Association by the January 3, 2023, deadline, we believe it is very important for the individual voices and stories of our members to be heard as well. 

During the October 20, 2022, meeting the FTC made it a point to call out moving stories of consumers who felt that they were in some way wronged in their funeral service experience. We want to make sure that the FTC knows that funeral service professionals are people too and your hard work, dedication, and service should be acknowledged, and your voices heard!

You can help by preparing a response to the FTC’s Advance Notice of Proposed Rulemaking Request. We ask that you include the following elements, if you are so inclined:

1. Prepare your own comments in response to the issues outlined in the FTC’s Advance Notice of Proposed Rulemaking Request.
2. Include support for NFDA’s comments, positions, and proposed changes.
3. TELL YOUR STORY! Pick an element or two (or more) that you are particularly passionate about and let the FTC hear about it. You have many moving stories of how your efforts to serve families with compassion and dignity have been hampered by the requirements of the Funeral Rule!

You may file your comments:

• Online at https://www.regulations.gov/document/FTC-2022-0067-0001
  • To ensure the Commission considers your online comment, please follow the instructions on the web-based form.
• Or on paper
  • Write “Funeral Rule ANPR, Project No. P034410” on your comment and on the envelope
  • Mail to: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue, NW, Suite CC-5610 (Annex B), Washington, DC 20580
  • Because of public health protections and the agency’s heightened security screening, postal mail addressed to the Commission will be subject to delay.
• Comments must be received by the FTC on or before January 17, 2023, but do not wait until the last minute!
• Write “Funeral Rule ANPR, Project No. P034410” on your comment and include your name and your state.
• Please be aware that comments will be placed in the public record.

NFDA is doing its part to represent its members in this Funeral Rule review process, but your voice matters! That is why submitting a letter explaining to the FTC that you are a small business person who is dedicated to serving others can make a difference!¹ 

Background

As you know, as we were all returning home from the NFDA Convention in Baltimore, the Federal Trade Commission (FTC) announced it would be conducting an online open meeting on October 20. This meeting was more than two years after the Commission initiated a review of the Rule and requested comments on various issues and proposed changes to the Rule in 2020. NFDA provided comprehensive responses based upon its long-held positions on the Funeral Rule’s price list distribution requirements, the need for a variable basic service fee, allowing funeral directors to charge a fee for coordinating the delivery of third-party merchandise, and opposing the mandatory posting of GPLs on funeral home websites, among others, but no further action was taken by the Commission at that time.

During the meeting in October, NFDA leaders and members testified supporting NFDA’s positions. However, the FTC voted to retain the Rule and issue an Advance Notice of Proposed Rulemaking seeking comment on potential updates to modernize the Rule, including improvements to the public accessibility of funeral home price information. The Commission also issued a staff report that summarizes the results of their review of almost 200 funeral provider websites.

In the aftermath of the meeting on October 20, the FTC issued an Advance Notice of Proposed Rulemaking identifying areas of inquiry under consideration, the objectives the Commission seeks to achieve, possible regulatory alternatives, and seeking comment thereon. The FTC is seeking responses to 40 questions (with subparts) in seven different areas:

1. Online and Electric Price Disclosures
2. Crematory Fees and Additional Costs
3. Reduced Basic Fee Services
4. Alternative Forms of Disposition
5. Embalming Disclosure
6. Price List Readability
7. Impact on People in Underserved Communities

The Commission made clear it would not be addressing other issues such as the expansion of the Funeral Rule to cemeteries or crematories.

The comments are due January 17, 2023. After the FTC reviews the comments, assuming it believes changes are still warranted, it will publish the draft proposed Rule changes at some point in the future. We will then have 60 days to make comments on those proposed changes.

Responding to the FTC’s Request

NFDA was invited to participate in a meeting on November 30, with several large organizations in the funeral service profession to discuss our positions and determine if it was possible to provide a unified response. CEO Christine Pepper, Senior Vice President of Advocacy Lesley Witter, and I attended on behalf of NFDA. We attended the meeting willing to listen to others’ thoughts and present NFDA’s positions on the issues. At the end of the day, there were many areas on which the parties agreed.

It is important to note that NFDA’s position is first and foremost that we are completely in support of transparency in pricing and want funeral consumers to know exactly what they are getting and how much it costs. However, we believe that revisions are not warranted – the legal burden to revise the rule has not been met – and the suggested changes would not further affect the intent of the rule.

We made clear in our comments submitted in October 2022 and will reiterate in this response, that the Commission should not double down on the inadequacies of the Rule by increasing regulation. Thirty-eight years of evidence has proven that price information is not going to make funeral consumers more price conscious. Additionally, any market imperfections that do exist would be more effectively and quickly addressed by the free market and the states.

That being said, it appears to be a foregone conclusion that the FTC intends to institute new rules regarding the issues they have presented. We believe that if NFDA doesn’t provide recommendations on how revisions could be reasonably implemented, the FTC will proceed regardless, and the resulting rules would not be favorable. 

Therefore, it is important that we suggest changes to the Rule that would address the FTC and consumer group’ concerns, while simultaneously providing clarity and guidance for funeral service professionals.

Below are the areas of inquiry and NFDA’s positions on them. It is important to note, that other than a few exceptions, based on the slightly different questions posed by the FTC, the positions noted below are identical to the proposed changes submitted by NFDA in 2020. There were other changes proposed by NFDA in 2020 that will be omitted from the comments we will submit on January 17, 2023, as the FTC has indicated they do not think changes outside the seven areas submitted are warranted.

I. Online & Electronic Disclosures – Should the Rule be changed to require (a) all funeral providers (b) funeral providers that maintain websites or (c) funeral providers who sell funeral products or services online, to prominently display their GPLs, or a clearly labeled link to their GPLs, on their websites?

• While we oppose a rigid federal rule that would mandate posting of price lists online, it is most likely a foregone conclusion that the FTC will impose such a rule. Therefore, it is important to suggest changes to the Rule that would address the FTC and consumer groups’ concerns and allow for posting of price lists, while simultaneously providing clarity and guidance for funeral service professionals. Thus, we propose the following changes to:
• HOW to meet the requirement – The Rule should be modified to require that funeral providers who own and maintain a website under their control shall provide means on the website for consumers to request price information. This would include funeral home websites owned by the funeral home, but run by a third party, and exclude sites owned by third parties like Facebook or Twitter.
  • Regardless of the method of a request for price information (via website or in person), a funeral professional may provide their pricelists either by personal delivery, mail, fax, e-mail, or by posting a link to them on the funeral home website.
  • Funeral providers who do not maintain their own website are exempt from this requirement.
  • Social media and advertisements should be exempt from the requirement because there are better ways to convey such detailed information and are not always under the control of the business.
• WHEN is the requirement triggered – The Rule should be revised to make clear that the obligation to produce price information under the Rule is only triggered when someone specifically asks the funeral provider about pricing. ²
  • This is a significant issue for funeral directors and would clear up one of the most confusing, and cited, elements of the Rule. We believe that a win here would do more for fairness in funeral service than any of the other changes combined.
• Require that if a funeral provider completes funeral contracting or arrangements without requiring the consumer to be present with the funeral provider, that funeral provider must provide its price lists online.

II. 3rd Party Crematory Fees and Additional Costs – Should all funeral providers be required to list third-party crematory fees in the description and price for direct cremation on the GPL? 

• We believe that this issue is addressed in the current Rule and recommend leaving the language as is.
• Crematory and other third-party costs are already included in the definition of Cash Advance Items³ and covered by the Rule. They must be presented to the consumer to the extent then known or reasonably ascertainable and itemized. If the prices are not known or reasonably ascertainable, a good faith estimate must be given, and a written statement of the actual charges shall be provided before the final bill is paid.
• Funeral providers are not able to control what third-party providers charge. Sometimes funeral providers use several different providers, and the prices may change unbeknownst to the funeral provider until they are actually purchased from the third-party and after the time a price list is provided to the family. Requiring a funeral provider to provide prices on a static price list for prices that are outside their control and subject to change without notice is likely to create confusion and frustration with the family who may feel the funeral provider was dishonest with them. Not to mention the impossible time and economic burden imposed on the funeral provider in having to keep up with, and revise price lists, on a constant basis based on forces outside their control.

III. Reduced Basic Service Fees – Should the Rule be amended to clarify when funeral providers may charge a reduced basic services fee?

• Yes, funeral providers should be allowed to offer reduced basic service fees, depending upon the complexity and size of the funeral that the consumer requests.
  • A funeral provider would not be able to charge more than their basic service fee but can reduce it.
• Currently, the FTC requires that the full basic service fee be charged when the consumer wishes to add any type of service to a direct disposition. This unfairly penalizes consumers by requiring them to either pay significantly more or forego the desired service. Additionally, it quashes innovative offerings by funeral homes. This is especially true for low-cost providers who wish to offer consumers direct disposition along with the opportunity to hold small gatherings or simple ceremonies for a minimal fee.
• The Rule currently has created an artificial price floor keeping prices artificially high. This change will provide consumers more value at a lower price.

IV. Alternative Forms of Disposition – Should the Rule language be amended to specifically address alternative forms of disposition, including alkaline hydrolysis and natural organic reduction?⁴ 

• The Rule covers this and it is regulated by the states, but we recommend the language be revised to include other emerging alternative forms of disposition.
• The recommendation is to revise “Direct cremation” to “Direct disposition” and include “other means allowed by state law”
• Other references to “direct cremation” will need to be changed to “direct disposition.”
• Additionally, in order to ensure that containers required for other alternative forms of disposition, such as natural organic reduction be considered, we recommend that the definition of “Alternative container” in §453.1(a) be revised to read to include other container required for disposition.
• The proposed revision allowing for a reduced basic services fee addresses the concern of the exclusion of alternative forms of disposition from the four exceptions to the Rule by allowing funeral providers to charge less than the basic services fee for alternative forms of disposition that may require reduced services like alkaline hydrolysis and natural organic reduction.

V. Embalming Disclosure – Should the embalming disclosure contained in section 453.3(a)(2)(ii) of the Rule be amended to ensure consumers understand the specific circumstances in which embalming may be required under state law?

• We recommend slightly revising the embalming language and adding “refrigeration” to clarify and address the varying state laws on the subject.

VI. Price List Readability – Should the GPL, CPL, and/or OBCPL requirements be changed to improve readability for consumers?

• This is a real issue. We want to make sure that everyone has access to the information provided. Luckily, this matter has already been addressed by Title III of the Americans with Disabilities Act and other state regulatory laws. We see no need for additional regulation.
• Any further regulation by the FTC could potentially be in conflict with the ADA requirements, which are regularly revised and would place a significant burden on funeral providers.

VII. Impact on People in Underserved Communities – Are there any funeral provider practices that disproportionately target or affect certain groups, including lower-income communities, communities of color, or other historically underserved communities?

• Funeral professionals serve every community at every price point, and don’t refuse service to any population regardless of their race, creed, or background; therefore there are no communities underserved by the profession. 
• In addition, funeral providers are well known for reducing or eliminating fees for those who are unable to pay. There are also state and community programs in place to help these populations.
• We would like to see a change in the Rule that would allow, but not require, funeral providers to translate price lists and Statements of Funeral Goods and Services Selected into the languages of the communities they serve.

NFDA will keep you apprised as this rulemaking process progresses. If you have any questions about NFDA’s positions or how you can submit comments, please contact me at cfarmer@nfda.org or 262.814.1532.

Notes: 

1. You are solely responsible for making sure that your comment does not include any sensitive or confidential information. In particular, your comment should not include any sensitive personal information such as your or anyone’s Social Security number, date of birth, driver’s license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. For more information on guidelines, please see the FTC’s website listed above.
2. As opposed to the current requirement that price information be produced, “when you begin to discuss any of the following: the type of funeral or disposition that you can arrange; the specific goods and services that you offer; or the prices of your goods and services.”
3. §453.1(b) Cash advance item. A ‘‘cash advance item’’ is any item of service or merchandise described to a purchaser as a ‘‘cash advance,’’ ‘‘accommodation,’’ ‘‘cash disbursement,’’ or similar term. A cash advance item is also any item obtained from a third party and paid for by the funeral provider on the purchaser’s behalf. Cash advance items may include, but are not limited to: cemetery or crematory services; pallbearers; public transportation; clergy honoraria; flowers; musicians or singers; nurses; obituary notices; gratuities and death certificates.
4. This change was not proposed in NFDA’s 2020 comments. Previously, the question was asked whether the definition of “Cremation” should include other forms of disposition. This proposal is a new way to address the question of emerging forms of disposition.