High number of violations revealed in FTC probe of funeral homes

The FTC has found a sizable portion of funeral homes in noncompliance with federal regulations. Image from Wikimedia Commons.

The Federal Trade Commission recently conducted a probe into the funeral business, to see if funeral homes were complying with federal rules related to their trade. The FTC found evidence of major violations in a significant number of funeral homes.

The business of death

Funerals and burials were an $11 billion industry as of 2008, according to Businessweek. Like any industry, a number of operators fleece customers because they can get away with it.

To guard against funeral homes exploiting the bereaved, the Federal Trade Commission has a set of regulations, dubbed the Funeral Rule, which mandates people receive itemized lists of costs and can opt for products from other vendors, such as caskets and floral arrangements and so forth, according to Time magazine.

A recent FTC probe has also found found evidence of rampant abuse in the funeral industry.

Price disclosure violations

The FTC, according to CNN, has been regularly conducting undercover probes at funeral homes since 1996, sending undercover agents into funeral parlors to see if their practices are commensurate with FTC regulations. This most recent probe, conducted in 2011, sent agents to 102 funeral homes located in various cities in nine states.

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The FTC found “significant” violations of the Funeral Rule in 23 of 102 locations and “minor compliance” violations in 33 locations. Failure to disclose or refusing to give prices were the most common violations, according to Time. The FTC, according to the press release on its website, has found significant Funeral Rule violations in 400 of the 2,500 funeral homes it has inspected since 1996, or about 16 percent.

Funeral fraud

In July 2011, the FTC, according to its website, sued two funeral homes, claiming they violated the Funeral Rule, one in Illinois and one in Washington, D.C. Both were sued for not providing prices to customers.

In March of that year, according to the FBI, William McGuire, owner of McGuire Funeral Home in Vivian, La., was sentenced to 10 years in prison and ordered to pay a $463,586 fine for defrauding 68 people of $450,000. Customers started funeral trusts, putting money into CDs with McGuire’s business as the recipient. McGuire created phony funeral invoices to cash the trusts early.

In New Baltimore, Mich., according to the NewBaltimorePatch, funeral director John Olszewski, owner of three funeral homes, is currently awaiting trial on charges of contract fraud, for illegally selling and improperly administering funeral trusts.

Always ask for prices

If dealing with a funeral home, always ask for a price list, as they are mandated to provide one by FTC regulations. It would behoove consumers to know their rights under the Funeral Rule, available on the FTC’s website.