FTC Phone Sweep - What You Need to Know About the Funeral Rule

In a recent development, the Federal Trade Commission (FTC) has taken a stern stance on Funeral Rule violations within the funeral industry. The FTC's announcement in January 2024 revealed that it is issuing warning letters to 39 funeral homes nationwide following its inaugural undercover phone sweep. This covert operation, conducted in 2023, aimed to assess pricing transparency among funeral service providers.

The Investigation: The FTC's East Central Region, Northwest Region, Southeast Region, Southwest Region, Midwest Region, Western Region - Los Angeles, Western Region - San Francisco offices, and the Bureau of Consumer Protection's Division of Marketing Practices collaborated on this undercover phone sweep. More than 250 funeral homes were contacted to evaluate their compliance with the Funeral Rule.

Findings and Violations: The investigation unveiled that 39 out of over 250 funeral homes violated the Funeral Rule during these calls. Despite the subjective nature of the undercover shoppers' assessments, the FTC reported a compliance rate exceeding 85%, consistent with or surpassing the results of previous in-person secret shopper sweeps. Violations included refusals to answer pricing questions, inconsistent pricing for identical services, misrepresentation of local health codes, and improper provision of pricing information.

FTC's Response: The FTC responded to these violations by issuing warning letters to the implicated funeral homes. The letters emphasized the Funeral Rule's requirement for funeral providers to disclose prices, including itemized information over the phone. Funeral homes were urged to take immediate corrective actions to ensure compliance. Failure to adhere to the Funeral Rule could result in penalties of up to $51,744 per violation!

Understanding the Funeral Rule: The Funeral Rule mandates transparency in the funeral industry, necessitating accurate disclosure of offerings and prices, even during telephone inquiries. Funeral providers must provide information to callers,  without asking for personal details. The FTC advises against focusing solely on package prices, emphasizing the inclusion of itemized and minimal services in the pricing discussion.

Guidelines for Funeral Professionals: To assist funeral professionals in maintaining compliance, the FTC offers clear guidelines. While answering machines can be used to record calls or direct inquiries to specified numbers during business hours, funeral providers are not obligated to provide price information electronically.

Legal Implications: It is a violation of the rule to misrepresent state or local laws and making deceptive statements, such as falsely claiming embalming requirements. These misrepresentations are prohibited at all times, emphasizing the importance of honesty and accuracy in dealings with consumers.

Funeral professionals, take heed of the FTC's crackdown on Funeral Rule violations. Compliance is not just a legal obligation; it's a commitment to transparency and integrity within the industry. As you navigate these guidelines, ensuring open communication and accurate information with callers is not just a best practice, but a fundamental responsibility in serving families.

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