Funeral-Related Industries:

Complaints and State Laws Vary, and FTC Could Better Manage the Funeral Rule

GGD-99-156: Published: Sep 23, 1999. Publicly Released: Oct 21, 1999.

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Pursuant to a congressional request, GAO examined various issues involving consumers' dealings with funeral-related or death care industries, which include businesses that provide funeral and cemetery goods or services, focusing on: (1) the availability of information on the nature and extent of consumer complaints about death care industries; (2) the Federal Trade Commission's (FTC) efforts to ensure compliance with its Funeral Rule; and (3) selected state governments' roles in protecting consumers in their death care transactions.

GAO noted that: (1) comprehensive information on consumer complaints that would indicate the overall nature and extent of problems that consumers experienced with various aspects of death care industries was not available for a variety of reasons; (2) one reason is that consumers can complain to a variety of organizations about death care issues and can lodge the same complaint to more than one organization; (3) another reason is that no single organization or combination of organizations collects and compiles all complaints into one database; (4) also, each organization can have its own way of compiling and maintaining complaint information, which would confound efforts to compile and analyze aggregate complaint data; (5) although the organizations GAO contacted were able to provide some data, the number of complaints about death care was generally low compared to complaints about other categories of consumer issues; (6) FTC's Funeral Rule requires that funeral providers give consumers accurate, itemized price information and various other disclosures about funeral goods and services; (7) over the last 5 years, FTC has taken steps, including distributing compliance guides and working with the funeral home industry, to promote compliance with the Funeral Rule; (8) FTC took these steps because it was concerned about what it perceived as a relatively low level of compliance--about one-third--among funeral homes in the late 1980s; (9) FTC maintains that compliance among providers covered by the Rule has increased substantially over the years; (10) however, FTC does not have a systematic or structured process for measuring funeral homes' compliance so that overall conclusions can be drawn about their actual compliance with the Rule; (11) FTC's efforts to measure compliance have been limited to narrowly scoped test-shopping sweeps in selected areas; (12) GAO analyzed the available records of funeral homes FTC test-shopped in fiscal years 1997 and 1998; (13) GAO's analysis indicated that among the limited sample of homes visited, compliance indeed was high for the Funeral Rule's core requirement and somewhat lower for other elements of the Rule GAO reviewed; and (14) the five selected states differed in their approaches to protecting consumers who deal with funeral homes and cemeteries and make preneed arrangements.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To help assess the overall effectiveness of FTC's Funeral Rule enforcement strategy, the Chairman of FTC should: (1) review possible approaches to determine the most cost-effective means for FTC to conduct sweeps that would result in both a more convincing sample of funeral providers and a broader analysis of the various requirements of the Funeral Rule; and (2) develop and implement a plan for carrying out such an approach in a systematic manner.

    Agency Affected: Federal Trade Commission

    Status: Closed - Implemented

    Comments: In its letter to the Chairman of the House Appropriations Committee, pursuant to 31 U.S.C. 720, FTC stated that, with regard to this recommendation, it was assessing its approach toward creating a statistically valid representative sample of funeral providers. As of August 2003, FTC staff stated that they constantly evaluate the methods by which the funeral rule may be enforced through, among other things, funeral home sweeps. FTC staff reported that FTC makes decisions about its approach yearly as part of their strategic plan.

    Recommendation: To ensure that FTC can consistently: (1) determine whether violations of the Rule's requirements occurred; and (2) document the specific reasons FTC did or did not act on such violations, the Chairman of FTC should train FTC staff on the specific standards needed for a consistent and acceptable level of documentation.

    Agency Affected: Federal Trade Commission

    Status: Closed - Implemented

    Comments: FTC revised its Funeral Rule Offenders Program (FROP) handbook to include specific procedures for capturing, in detail: (1) the specific violation found during test shopping that is done as part of a funeral home sweep; and (2) a written explanation of factors considered when making decisions about actions taken on funeral homes subject to test-shopping. FTC's revised procedures also call for a new two-tiered review of the file on each funeral provider shopped--an initial review by the coordinator of each individual sweep and a final review by the program coordinator. According to FTC's Funeral Rule Coordinator, FTC has also trained regional staff responsible for conducting sweeps about the new procedures via a series of conference calls.

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