The Federal Trade Commission (FTC) is considering updates to the Funeral Rule, a decades-old rule that aims to protect and inform consumers who purchase funeral services. The current rule leaves consumers in a poor position to compare prices because pricing information for funeral goods and services is hard to access. For this reason, the FTC should change the rule to require that funeral providers list their prices for various products and services online. The Commission should also require funeral providers to note what items are legal requirements for funeral services, and what items are voluntary additions, on their itemized price lists.
The FTC enacted the Funeral Rule in 1984 in response to reports that funeral homes were taking advantage of consumers. Among other requirements, the Funeral Rule states that funeral providers must disclose the cost of goods and services and provide an itemized price list for goods and services to those who inquire in person. Providers must also accurately summarize the list over the phone. The rule is intended to help consumers understand the market for funeral goods and services, select items that they need or want, and make informed purchasing decisions.
While inquiring over the phone and in person made sense in 1984, the rise of e-commerce has dramatically changed how consumers shop for goods and compare prices. Consumers overwhelmingly rely on the Internet to research pricing before making a purchase. Yet, the funeral services industry has not modernized to reflect these behaviors. Consumers reported to the FTC that funeral providers refused to send itemized price lists by any digital means, even when requested directly by phone or email. A 2022 FTC staff review of funeral providers found that fewer than 25 percent offered a full list of prices on websites, and more than 60 percent offered no pricing information at all.
The current rule limits consumers from comparing prices when arranging a funeral. People planning a funeral remotely, people with disabilities, and ill or elderly people often cannot visit multiple funeral homes to inquire about pricing information. Moreover, the Funeral Consumers Alliance of Utah reported that hospitals often require that families contact a funeral provider immediately after determining the cause of death. If the death is relatively unexpected, consumers may be unable to obtain any pricing information before selecting a funeral provider.
Finally, consumers would significantly benefit from being able to easily compare prices in the funeral services industry. Research shows that consumers who made pre-need funeral arrangements saved nearly $1,400 in 2001, compared to consumers who did not. The difference is so large because there is very little price uniformity in the funeral goods and services industry. Consumers’ Checkbook, a consumer advocacy nonprofit, found that, in 2020, the cost of basic services, such as embalming, vary dramatically from provider to provider, but that higher prices often do not correlate with better reviews.
Posting prices online imposes little costs on funeral providers. For these reasons, the FTC should move forward with proposed rulemaking to update the rule to require that funeral providers, if they maintain a website or social media accounts, post or directly link to the itemized price list from their websites or social media accounts. The FTC should also require that funeral service providers indicate on price lists what items, if any, are legally required for funeral services. All these changes would also aid consumers in making truly informed decisions when purchasing funeral goods and services and would modernize the rule to continue protecting and benefiting consumers.
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