How to avoid overpriced funerals

Most people are too traumatized by the loss of a loved one to look for the best funeral price. But now that the FTC is reviewing its rules, a consumer advocate explains how to avoid being scammed when you're most vulnerable.

For the funeral industry, the COVID-19 pandemic marked the coming of good times. Revenues for Service Corporation International, the largest funeral home chain in the U.S. with more than 1,500 funeral homes and 400 cemeteries, have skyrocketed. And the "COVID impact," as a recent investor newsletter put it, has helped SCI more than double its earnings per share between 2019 and 2021.

Funeral prices have always been high. According to the National Funeral Directors Association, funeral homes last year charged an average of $7,848 for a viewing and burial and $6,970 for cremation. These costs do not include cemetery fees, which can increase by thousands. ProPublica recently investigated one cemetery whose service fees can run into the tens of thousands of dollars.

The federal government has done little to regulate this industry. Thirty-eight years ago, the Federal Trade Commission tiptoed into the field by requiring funeral homes to disclose their prices. But cemeteries, some of which are under state control, were exempt from those rules. The FTC has been conducting a rare review of its rules for two years now and is considering a wide range of proposals, including extending the rules to cemeteries, requiring prices to be published online and disclosing that embalming is not required by law. In response to a series of questions about the status and timing of the process, an FTC spokesperson responded only that "review is ongoing."

Joshua Slocum, executive director of the Funeral Consumers Alliance, the only national consumer organization that monitors the funeral industry, has been advocating for changes to the FTC's Funeral Rule for decades. Regardless of what the agency decides, Slocum wants consumers to know their rights and also have some tips at their disposal when preparing for a loved one's burial.

This conversation has been edited for clarity.

Many may be surprised to learn that at least part of the death industry is regulated. What is regulated and what is not?

Let's talk about the federal [regulations] because that's the most important for the basics of what people need to know. There's what's called the Funeral Rule, which is a Federal Trade Commission regulation that gives consumers certain rights, and they would be very wise to exercise those rights.

First, they have the right to get price quotes over the phone.

Second, when they come to the funeral home in person to discuss funeral arrangements, they are entitled to a printed, itemized price list - think of it like the menu at a restaurant.

Third, they have the right to choose on an item-by-item basis. Funeral homes do not have the right to offer you only a package of services. They will try to offer you a package of services and will often say, "You will save money if you buy everything together in a package." But, as with all packages, you have to look and realize, is this really something I would spend money on by itself? Am I really saving money? Or am I just getting a bunch of stuff I wouldn't have chosen anyway?

What are the first steps to take after the death of a loved one?

First, remember that death is not an emergency. When death occurs, it means by definition that the emergency is over. The worst that can happen has already happened. A person will not become deader, to put it bluntly.

Pick up the phone and call at least five different funeral homes within a 20-30 mile radius of where the deceased is located. Find out the prices. Take the time to at least look them over and compare prices before agreeing to have the funeral home pick up the body. If the person dies in a hospital, which is most often the case, you will have more options. Ask the hospital if the body can be left in the morgue for a couple days while you make an informed decision about which funeral home to go to.

Second, estimate your budget. You need to know this figure. Decide in advance what you can afford. And for God's sake, please don't do that, "Oh, money is not the main thing. It's my mom. She deserves the best," and then three months later you get a $15,000 bill that you can't pay.

What happens when you comparison shop?

If you pick five or six funeral homes located in the same city or region and survey them, you will find that there are thousands of dollars in price differences for the same services within the service area available to you. And you wouldn't know it because the vast majority of people will say, "Oh, well, we just use our family's funeral home." And I'll ask them: "Why do you always go there?"

The bottom line is no one has a family car dealership, no one has a family utility company, no one has a family anything else. They compare prices and services. The problem is that since this is a death transaction, and since we only sign a check on average once in our lives, we have no practice at it. And because it is the most emotional business transaction we will ever encounter, many make the mistake of thinking of a funeral home in the same emotional category their church lives in. That mistake is. Your funeral home is not your minister. Your mortician is not your counselor. Your funeral director is a death car salesman. And I don't mean that in an offensive way. I mean it in a straight business sense.

How come funeral homes are subject to some federal regulations but cemeteries are not?

Cemetery regulation is so weak that I consider this industry unregulated, even though it is technically regulated by state laws.

Until the twentieth century, cemeteries were never considered a profit-making capitalist enterprise. By law or by community agreement, they were considered a public good, something close to what a church does. They were therefore seen as non-profit community organizations that were not subject to normal business regulation. This changed in the twentieth century when it became possible to organize a commercial cemetery in many parts of the country.

But the rules were never adopted. The same types of deception that have been documented and led to the adoption of the Funeral Rule have always occurred in cemeteries.

I think the likelihood of the FTC bringing cemeteries under the burial rule this time is very slim. We've tried that many times before. There are complicated reasons for that. One is that many cemeteries in many states are organized under nonprofit corporation law. The FTC has no jurisdiction over that, which is a real systemic problem.

What deceptive acts in the cemetery are you referring to?

All the same things that funeral homes did before the law changed. The FTC rule does not apply to cemeteries, so they are not required to give you a printed price list. They are not required to let you choose from the options offered. Many cemeteries get up to all sorts of silly games, for example, if you don't want to buy that cemetery's headstone, they take offense that they are not making a profit off of you. So if you go to a third-party monument seller, the cemetery will impose what's called an "inspection fee" on you, which is exactly the difference in value they lost if you didn't buy their stone.

What has changed now that the FTC is considering changes to the Funeral Rule, and what needs to happen for some of these proposals to be implemented?

Well, the FTC has to act. It's been two years since the FTC announced a rule revision, and revision means considering changes. I don't have extensive inside knowledge, but I can tell you that in talking to the staff, I believe they are taking this issue seriously. I believe they are seriously considering updating the rule to require funeral homes to set prices online.

Under current federal regulations, you may receive a paper price list if you appear in person at the funeral home. We think funeral homes should post prices on their website. But until they do, you may have to make a phone call.

Do many funeral homes publish their prices online even though they are not legally required to do so?

We, the Funeral Consumers Alliance, and our partner organization, the Consumer Federation of America, have conducted two studies on the level of online price posting. We conducted one in 2018, taking a sample of 25 cities. We found that only 16% of funeral homes posted their price lists online. We just did a new version of the study that was greatly expanded to a sample of 1,046 funeral homes in 35 different states, and we found that only 18% of them post their prices. So no, most funeral homes hide their prices online.

Do you think the industry's gain from COVID-19 will affect the FTC's decision?

I think our perception and reaction to COVID has played a role in a lot of things. One of the things that was really unfortunate for funeral consumers is that COVID was exactly the period when an online price list would have been most helpful to grieving families, and we didn't have one. People were afraid to visit businesses in person, or there were statewide restrictions on doing business in person. So many made arrangements over the phone or long distance.

Large corporations that own hundreds of funeral homes and cemeteries across the country are opposing the rule changes - what are their reasons? What is your opinion?

For example, "We believe this is a very personal transaction and the price discussion should take place in a traditional manner, and consumers don't buy on price anyway, so it's not necessary." That's what they're saying. There's nothing complicated about it. They just don't want to be regulated. From my perspective, their arguments are very weak. First, the requirement to post price lists online literally costs the funeral industry $0 dollars. Do you know what that costs them? It costs them the time it takes to click on the button that says "download PDF".

More broadly, how have multi-billion dollar conglomerates like SCI changed the funeral industry?

Here's the reality: They still only have 12% of the funeral homes in this country. And that figure has remained constant for 20 to 30 years. In some cities, like Seattle, many cities in Florida, where there are large concentrations of seniors, SCI has a much higher market share. That's really the case. In these places, SCI tends to be the most expensive funeral home in any market. So if this is important to you, find out who owns your local funeral home. If the sign still says McGillicuddy, it doesn't mean it is still owned by Mr. McGillicuddy.

Are there practical things consumers can do to reduce the cost of a funeral?

The most economical thing to do is to choose a funeral home that already has reasonable prices. Choosing a funeral home is the #1 factor in determining the cost of services. Once you have chosen a funeral home, scrutinize its offerings and see how much of it you can afford while staying within your budget. Remember that you can shop a la carte. So if your budget is $2,000, you need to face it. For $2,000 dollars, you are not going to buy a traditional funeral with embalming, public viewing of the body, a metal casket, and burial in a cemetery. You won't get that for $2,000 anywhere in the United States. That means your choice would be something like a simple cremation, even if you don't like it. People have to be realistic.

Is it possible to negotiate a price? How does it work?

Yes, just as you would do with any other business you negotiate with. They don't have to bargain with you, but you have the right to do so. We have people come to us who say, "The funeral home has already picked up the body, and we like this funeral home, but it's more expensive than the other one we found in town, and we just can't afford it." And I suggest we talk to the funeral director and say, "Look, you've taken good care of us before, we appreciate you coming to pick up our grandmother, but we literally cannot afford your price for this direct burial. We would love to give you our business. Can you meet your competitor's price? We understand that you are under no obligation to lower your prices. But we would like to do business with you. If you can't lower your prices, we will have to move her body elsewhere."

And that's okay?

And why not? Here's what I'm hearing underneath, and I think you're correctly conveying this from people: What people are doing is asking permission. But you don't break societal rules. You're not acting cheap. I know what people are thinking, "I don't want to do that. It's not nice. It means I'm not taking care of my mother." Stop it. It's nonsense. If you showed how much you loved your mother by how much you spent on her funeral, you would be broke. You can't express love with money.

Finally, what are some of the biggest misconceptions associated with this process?

Most of what people think they must purchase is not true. For example, many people think that embalming is required by law if you are going to look at a body. This is not true in any state in the United States. It is also not true that embalming is required as a condition of burial in the ground. That is internal funeral home policy, not the law. So there is little legally required of you. Basically, the only things that must happen when a person dies to comply with the laws are a death certificate signed by a doctor, the body must be buried, cremated, or donated to an anatomy lab within a certain period of time, and that is literally all that is required. Everything else is optional.

Go into this deal knowing that while it's emotional, you are the consumer, you decide what to put in your shopping cart. You are under no obligation to buy these items. It's a choice, and you have to make choices that fit your family's budget and emotional preferences.