As you may be aware, the Wall Street Journal published an article today, “How the Funeral Industry Got the FTC to Hide Bad Actors.” The exceptionally disappointing article offers a one-sided look at the history of the Federal Trade Commission’s (FTC) Funeral Rule Offenders Program (FROP). Despite NFDA working with the reporter over the course of the last month to provide copious amounts of information about the history and effectiveness of FROP, the article ignored key facts and presented a biased picture of the funeral service profession and NFDA. Further, the article relied on inaccurate tropes that have been used to disparage funeral directors for decades. 

We know that this article, while highly visible, does not reflect the people who care for grieving families and the dead, not just according to the law, but with a high degree of ethics, compassion, and professionalism. 

To that end, on your behalf, NFDA will be responding to this article by sending a letter to the editor of the Wall Street Journal pointing out the missed opportunity to present a full and accurate picture of the profession, compliance with the Funeral Rule and the FROP program. 

NFDA will also advocate for you by doubling down on its efforts to share positive stories about funeral service and educate consumers about the value of meaningful funerals and the vital role that funeral directors play in helping grieving families begin their grief journey through our consumer outreach initiative, Remembering A Life, and our comprehensive media relations efforts. 

The Other Side of the Story

Compliance with the laws and regulations that govern the funeral service profession is of utmost importance. 

NFDA and the FTC share the belief that consumers should be protected and have certain basic rights, like pricing transparency, which are afforded to them under the Funeral Rule. This enables consumers to make informed decisions by choosing the funeral services and goods that fit within their budget. 

NFDA is proud of its efforts over the last 30 years to work with the FTC to ensure funeral directors are in compliance with the Funeral Rule. One of the ways we work with the FTC to do this is through FROP. 

FROP is a program of which most funeral directors are unaware. As NFDA detailed in an article a few weeks ago, FROP was designed to offer an educational alternative to an FTC lawsuit when a funeral home has twice been found to be in violation of the Funeral Rule. There are many components to this program, which lasts a minimum of three years, but it includes requirements such as a review of all price lists, annual training and tests of staff knowledge of the requirements of the Funeral Rule, and a final assessment to ensure the firm is clear on its obligations to consumers (click here to learn more about FROP). 

Offering an educational alternative to a federal lawsuit is important because the vast majority of funeral homes that face alleged violations of the Funeral Rule do so because, in the opinion of an FTC secret shopper, a member of the staff failed to present a GPL or other price list in a timely manner. 

The current requirement is 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.” This requirement is vague, overbroad, and inconsistently interpreted by secret shoppers.

Most funeral homes that have participated in FROP did not intentionally violate the Funeral Rule. In nearly every case, the alleged violations may be a result of either the undercover shopper or the funeral director simply misunderstanding when their discussion got to a point when the requirement to hand out price lists was triggered.

FROP has benefitted consumers because, of the more than 500 funeral homes that have participated in the program, only three have been issued subsequent violations. Every other FROP participant is meeting their obligations to consumers under the Funeral Rule. This shows that FROP is working and ultimately benefits consumers. 

In fact, the FTC welcomed the development of FROP and they often touted it to Congress as an example of how the FTC was partnering with industry to protect consumers.

Overall, compliance with the Funeral Rule has improved. In fact, according to the most recent report on secret shopper investigations, the FTC staff determined that only 39 of the more than 250 funeral homes shopped violated the Funeral Rule on these calls. While the compliance rate certainly should be higher, the FTC reported a more than 85% compliance rate, which is consistent, if not higher than, the result of prior in-person secret shopper sweeps. 

NFDA does not agree with the assessment that FROP represents “the fox guarding the hen house.” It is the FTC that is responsible for enforcing the Funeral Rule; the agency can shop any firm and cite those that violate the Rule. NFDA has never had a role in enforcing the Funeral Rule, nor does NFDA determine who is prosecuted and who is given the opportunity to enter into FROP.

Further, it is the FTC that determines which firms are eligible to participate in FROP. NFDA only learns of a violation when the FTC informs the Association that a funeral home wants to enroll in FROP. NFDA’s role is limited to education. If at any time the FTC determines we are not living up to the terms of our agreement to administer FROP, the agency can sever our agreement. 

A Reminder About Compliance

As you know, the Funeral Rule requires that funeral providers give consumers who inquire by telephone accurate information about their offerings or prices from their price lists and any other readily available information that reasonably answers their questions. This includes when the caller is a price list consolidator, competitor, or anyone else, whether they are a potential customer or not. Additionally, while funeral providers may ask callers to identify themselves, they cannot require callers to give their names, addresses, or phone numbers, and must provide them the required information, regardless.

The FTC also advises that funeral providers should not highlight only package prices and must include itemized and minimal services. When people call with pricing questions, you’re not required to provide them price lists electronically, but even if you do, you must still answer their questions over the phone. Sending them price information via other means doesn’t meet your obligation under the Funeral Rule.

However, funeral providers may:

• Use answering machines to record incoming calls or to advise callers to call a specified number during business hours to get price information;
• Decline to provide price information outside of regular business hours if that is the provider’s normal practice; and,
• Take a message if in the middle of an arrangements conference and call back to provide price information at a later time.

In each of these cases, the Funeral Rule requires that the funeral provider furnish price information promptly by returning the telephone call.

Further, it is a violation of the Funeral Rule to misrepresent state or local laws or make other deceptive statements, such as falsely claiming that the law requires embalming when that isn’t the case. The Funeral Rule prohibits misrepresentations about state or local laws or regulations at any time.

As you know, the FTC is currently considering revising the Funeral Rule. While we do not have a timetable for any changes yet, keep an eye out for updates from NFDA to keep you up to date on the latest developments.

For more of NFDA’s support and resources on Funeral Rule compliance, please visit www.nfda.org or contact NFDA’s General Counsel Chris Farmer at cfarmer@nfda.org.