Funeral Industry Practices Rule

Citation85 FR 8490
Record Number2020-02803
Published date14 February 2020
CourtFederal Trade Commission
Federal Register, Volume 85 Issue 31 (Friday, February 14, 2020)
[Federal Register Volume 85, Number 31 (Friday, February 14, 2020)]
                [Proposed Rules]
                [Pages 8490-8493]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-02803]
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                FEDERAL TRADE COMMISSION
                16 CFR Part 453
                Funeral Industry Practices Rule
                AGENCY: Federal Trade Commission.
                ACTION: Regulatory review; request for comment.
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                SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is
                requesting public comment on its Trade Regulation Rule entitled
                ``Funeral Industry Practices Rule'' (``Funeral Rule'' or ``Rule''). The
                Rule defines unfair and deceptive practices in the sale of funeral
                goods and services and prescribes preventive requirements to protect
                against these practices. The Commission is soliciting comments about
                the efficiency, costs, benefits, and regulatory impact of the Rule as
                part of its systematic review of all current Commission regulations and
                guides. All interested persons are hereby given notice of the
                opportunity to submit written data, views, and arguments concerning the
                Rule.
                DATES: Written comments must be received on or before April 14, 2020.
                ADDRESSES: Interested parties may file a comment online or on paper by
                following the instructions in the Instructions for Submitting Comments
                part of the SUPPLEMENTARY INFORMATION section below. Write ``Funeral
                Rule Regulatory Review, 16 CFR part 453, Project No. P034410,'' on your
                comment, and file your comment online through https://www.regulations.gov. If you prefer to file your comment on paper, mail
                your comment to the following address: Federal Trade Commission, Office
                of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B),
                Washington, DC 20580, or deliver your comment to the following address:
                Federal Trade Commission, Office of the Secretary, Constitution Center,
                400 7th Street SW, 5th Floor, Suite 5610 (Annex B), Washington, DC
                20024.
                FOR FURTHER INFORMATION CONTACT: Patti Poss (202-326-2413), Division of
                Marketing Practices, Bureau of Consumer Protection, Federal Trade
                Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580,
                [email protected].
                SUPPLEMENTARY INFORMATION:
                I. Background
                 The Commission issued the Funeral Rule pursuant to its authority
                under Sections 5 and 18 of the Federal Trade Commission Act to
                proscribe unfair or deceptive acts or practices.\1\ The Funeral Rule's
                goal is to lower barriers to price competition in the funeral goods and
                services market and to facilitate informed consumer choice.\2\ The Rule
                helps to achieve these goals by ensuring that: (1) Consumers have
                access to sufficient information to permit them to make informed
                decisions; (2) consumers are not required to purchase goods and
                services that they do not want and are not required by law to purchase;
                and (3) misrepresentations are not used to influence consumers'
                decisions.\3\
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                 \1\ Section 5(a) of the Federal Trade Commission Act, 15 U.S.C.
                45(a), prohibits ``unfair or deceptive acts or practices in or
                affecting commerce.'' Section 18 of the FTC Act, 15 U.S.C. 57a,
                permits the Commission to promulgate, modify, and repeal trade
                regulation rules that define with specificity acts or practices that
                are unfair or deceptive in or affecting commerce within the meaning
                of Section 5.
                 \2\ Original Funeral Rule Statement of Basis and Purpose, 47 FR
                42260 (Sept. 24, 1982).
                 \3\ Id.
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                 When it promulgated the Funeral Rule, the Commission recognized
                that the arrangement of a funeral is an important financial transaction
                for consumers, with unique characteristics that reduce the ability of
                consumers to make careful, informed purchase decisions. The Commission
                noted that funeral arrangement decisions must often be made while under
                the emotional strain of bereavement, and that consumers often lack
                familiarity with the funeral transaction. Further, ``consumers are
                called upon to make several important and potentially costly decisions
                under tight time constraints.'' \4\
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                 \4\ Id.
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                 The Commission issued the Funeral Rule on September 24, 1982, and
                it became fully effective on April 30, 1984.\5\ The original Rule
                included a provision requiring a regulatory review of the Rule no later
                than four years after its effective date to determine whether it should
                be amended or terminated.\6\ The Rule was amended effective July 19,
                1994,\7\ and the United States Court of Appeals for the Third Circuit
                upheld the amended Rule following a challenge by funeral industry
                groups.\8\
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                 \5\ Certain portions of the Rule became effective on January 1,
                1984 and others on April 30, 1984. 48 FR 45537, 45538 (Oct. 6,
                1983); 49 FR 564 (Jan. 5, 1984). Several funeral providers
                challenged the Rule, but it was upheld by the Fourth Circuit. Harry
                and Bryant Co. v. FTC, 726 F.2d 993 (4th Cir.), cert. denied, 469
                U.S. 820 (1984).
                 \6\ 16 CFR 453.10 (1982).
                 \7\ Amended Funeral Rule Statement of Basis and Purpose, 59 FR
                1592 (Jan. 11, 1994).
                 \8\ Pennsylvania Funeral Directors Ass'n, Inc. v. FTC, 41 F.3d
                81, 83 (3d Cir. 1994).
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                 The Rule specifies that it is an unfair or deceptive act or
                practice for a funeral provider to: (1) Fail to furnish accurate price
                information disclosing the cost to the purchaser for each of the
                specific funeral goods or services used in connection with the
                disposition of deceased human remains; (2) require
                [[Page 8491]]
                consumers to purchase a casket for direct cremation; (3) condition the
                furnishing of any funeral good or funeral service upon the purchase of
                any other funeral good or funeral service or charge a fee as a
                condition to furnishing any goods or services, such as a ``casket
                handling'' fee to consumers who provide their own casket; or (4) embalm
                the deceased for a fee without authorization when embalming is not
                required by law.
                 The Rule also specifies that it is a deceptive act or practice for
                a funeral provider to misrepresent the legal or local cemetery
                requirements for: (1) Embalming; (2) caskets in direct cremations; (3)
                outer burial containers; or (4) the purchase of any other funeral good
                or service. Further, the Rule prohibits misrepresentations that so-
                called ``cash advance'' items are provided to the consumer at the same
                price as that paid by the funeral provider, when that is not the case,
                or that any funeral goods or services will delay the natural
                decomposition of human remains for a long-term or indefinite time.
                 The Rule sets forth preventive requirements in the form of itemized
                price and information disclosures to ensure funeral providers do not
                engage in the unfair or deceptive acts or practices described above.
                First, the Rule requires funeral providers give persons inquiring about
                funeral goods or services a General Price List (``GPL'') to keep, which
                lists the goods and services they offer and their itemized prices,
                along with specific disclosures. Second, the Rule requires funeral
                providers show consumers a Casket Price List (``CPL'') identifying the
                caskets and alternative containers they carry, and an ``Outer Burial
                Container Price List'' (``OBCPL'') listing the vaults and grave liners
                they offer, along with specific disclosures.
                 On March 14, 2008, the Commission completed a second regulatory
                review (``2008 Review''), and concluded that the Rule was still needed
                and should be retained.\9\ The Commission also considered whether the
                Rule should be expanded to cover cemeteries, crematories and third-
                party sellers of caskets, monuments, and other funeral goods. However,
                the evidence amassed in the regulatory review record was not indicative
                of a sufficiently widespread pattern of unfair or deceptive acts or
                practices to suggest that, even if the record were to be developed
                further, it would justify an amendment proceeding to expand the Rule to
                cover those additional death care businesses.\10\ The Commission
                likewise determined that an amendment proceeding was not warranted for
                other changes advocated by some of the public comments.\11\
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                 \9\ 73 FR 13740 (Mar. 14, 2008).
                 \10\ 73 FR at 13742.
                 \11\ Id. In particular, the Commission found insufficient
                evidence that: (1) Widespread unfair or deceptive practices occur in
                the sale of pre-need funeral arrangements; (2) discount funeral
                packages offered in addition to itemized services cause consumer
                injury; and (3) adding additional disclosure requirements is
                necessary to remedy any widespread pattern of unfair practices. The
                Commission also determined that casket-handling fees should continue
                to be disallowed and that the provision allowing funeral providers
                to charge a single non-declinable fee for their basic services and
                overhead should be retained.
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                II. Regulatory Review of the Funeral Rule
                 The Commission reviews its rules and guides periodically to seek
                information about their costs and benefits, regulatory and economic
                impact, and general effectiveness in protecting consumers and helping
                industry to avoid deceptive or unfair practices. These reviews assist
                the Commission in identifying rules and guides that warrant
                modification or rescission.
                 With this document, the Commission initiates a new review. The
                Commission solicits comments on, among other things: (1) The economic
                impact of, and the continuing need for, the Funeral Rule; (2) the
                Rule's benefits to consumers; (3) and the burden it places on industry
                members subject to the requirements, including small businesses.
                III. Issues for Comment
                 To aid commenters in submitting information, the Commission has
                prepared the following questions related to the Funeral Rule. The
                Commission seeks comments on these and any other issues related to the
                Rule's current requirements. In their replies, commenters should
                provide any available evidence, including empirical analyses, that
                supports their position.
                A. General Regulatory Review Questions
                 1. Need: Is there a continuing need for the Rule? Why or why not?
                 2. Benefits and Costs to Consumers: What benefits has the Rule
                provided to consumers? Does the Rule impose any significant costs on
                consumers? Please quantify these benefits and costs wherever possible.
                 3. Benefits and Costs to Industry Members: What benefits has the
                Rule provided to businesses? Does the Rule impose any significant
                costs, including costs of compliance, on businesses, including small
                businesses? Please quantify these benefits and costs wherever possible.
                 4. Impact on Information: What impact has the Rule had on the flow
                of truthful information to consumers and on the flow of misleading
                information to consumers?
                 5. Compliance: Provide any evidence concerning the degree of
                industry compliance with the Rule. Does this evidence indicate that the
                Rule should be modified? If so, why, and how? If not, why not?
                 6. Possible Recommended Changes: What modifications, if any, should
                the Commission make to the Rule to increase its benefits or reduce its
                costs? How would these modifications affect the costs and benefits of
                the Rule for consumers? How would these modifications affect the costs
                and benefits of the Rule for businesses, particularly small businesses?
                 7. Unnecessary Provisions: Provide any evidence, including
                empirical analyses, concerning whether any of the Rule's provisions are
                no longer necessary. Explain why these provisions are unnecessary.
                 8. Additional Unfair or Deceptive Practices: What potentially
                unfair or deceptive practices, not covered by the Rule, related to
                funeral goods and services, are occurring in the marketplace? Are any
                such practices prevalent in the market? If so, please describe such
                practices, including their impact on consumers. Provide any evidence,
                such as empirical data, consumer perception studies, or consumer
                reports, that demonstrates the extent of such practices. Provide any
                evidence that demonstrates whether such practices cause consumer
                injury, and quantify or estimate that injury if possible. With
                reference to such practices, should the Rule be modified? If so, why,
                and how? If not, why not?
                 9. Product and Service Coverage: Should the Commission broaden the
                Rule to include products or services not currently covered? Provide any
                evidence that supports your position. What potentially unfair or
                deceptive practices related to products or services not covered by the
                Rule are occurring in the marketplace? Are any such practices prevalent
                in the market? If so, please describe such practices, including their
                impact on consumers. Provide any evidence, such as empirical data,
                consumer perception studies, or consumer reports, that demonstrates the
                extent of such practices. Provide any evidence that demonstrates
                whether such practices cause consumer injury, and quantify or estimate
                that injury if possible.
                [[Page 8492]]
                 10. Technological or Economic Changes: What modifications, if any,
                should be made to the Rule to account for current or impending changes
                in technology or economic conditions? How would these modifications
                affect the costs and benefits of the Rule for consumers and businesses,
                particularly small businesses?
                 11. Conflicts with Other Requirements: Does the Rule overlap or
                conflict with other federal, state, or local laws or regulations? If
                so, how? Provide any evidence that supports your position. With
                reference to the asserted conflicts, should the Rule be modified? If
                so, why, and how? If not, why not? Are there any Rule changes necessary
                to help state law enforcement agencies combat deceptive practices in
                the funeral services market?
                 12. Other State or Local Laws or Regulations: Are there state or
                local laws or regulations that lessen competition or impede consumer
                protection in the funeral-services market? Provide any evidence that
                supports your position. Should the Commission, through its advocacy
                work, encourage changes to these state or local laws or regulations? If
                so, what changes?
                B. Specific Questions Related to the Funeral Rule
                 13. Online and Electronic Price List Information:
                 a. Should all funeral providers be required to post their itemized
                GPLs, CPLs or OBCPLs online? Why or why not?
                 b. Should funeral providers that have websites be required to post
                their itemized GPL, CPLs or OBCPLs online? Alternatively, should they
                be required to provide an email address or other online mechanism for a
                website visitor to request the itemized price list information
                electronically and be subject to a time limit for replying to such
                requests? Why or why not?
                 c. If a funeral provider makes funeral arrangements without an in-
                person meeting (such as through a phone call, website, email, or text),
                should the funeral provider be required to provide an electronic copy
                of its itemized GPL, CPL, or OBCPL prior to a consumer making any
                selections? Why or why not?
                 d. How would any of these suggested modifications affect the costs
                and benefits of the Rule for consumers and businesses, particularly
                small businesses? Please quantify or estimate these costs and benefits
                wherever possible.
                 14. Casket and Outer Burial Container Information:
                 a. Should funeral providers be required to provide the CPL and
                OBCPL at the same time as the GPL? Why or why not?
                 b. Should funeral providers be required to combine the casket and
                outer burial container price information and disclosures into the GPL?
                Why or why not?
                 c. Should funeral providers be required to give consumers copies of
                their CPL and their OBCPL to keep, as they are required to do for the
                GPL? Why or why not?
                 d. How would any of these suggested modifications affect the costs
                and benefits of the Rule for consumers and businesses, particularly
                small businesses?
                 15. Price List Format:
                 a. Should funeral providers be required to provide their itemized
                price list information and disclosures in a standardized format? Why or
                why not? If so, how should a standardized format be developed and
                updated as the marketplace changes?
                 b. Would a standardized format make it easier for consumers to
                review and compare itemized price list information from multiple
                providers? Why or why not?
                 c. Would a uniform standardized format make it easier for funeral
                providers to prepare compliant itemized price lists, particularly small
                businesses? Why or why not?
                 d. How would such modifications affect the costs and benefits of
                the Rule for consumers and businesses, particularly small businesses?
                 e. If the Rule was modified to include a standardized format for
                some or all of the itemized price list information and disclosures,
                should use of such a form be a safe harbor for the Rule's price list
                requirements for a funeral provider? Why or why not?
                 16. Cremation and Cremation-Only Funeral Providers:
                 a. What percentage of consumers are choosing cremation each year?
                What is the annual dollar volume of sales for cremation services? How
                has that changed in the last five years, in the last ten years, and
                since the Rule was enacted?
                 b. Should funeral providers be required to include the cost, or the
                range of costs, of any crematory fees that will be charged by outside
                providers for cremation on their itemized price list? Why or why not?
                 c. What percentage of funeral providers offer only cremation
                services without any burial options as a final disposition? What
                percentage of funeral arrangements do these providers account for?
                 d. What, if any, modifications should be made in the Rule's
                itemized price list and disclosure requirements for funeral providers
                offering only cremation services as a final disposition? Why? How would
                such modifications affect the costs and benefits of the Rule for
                consumers and businesses, particularly small businesses?
                 17. New Forms of Cremation and Other Processes for Disposition:
                 a. What new forms of cremation and other processes for the
                disposition of human remains (such as chemical and organic reduction
                processes) are available in the U.S. market? What percentage of
                consumers are choosing these newer options? How has that changed in the
                last five years? How many providers offer these new types of
                disposition services and what is the annual dollar volume of sales?
                 b. What, if any, modifications should be made to the Rule in light
                of new and developing processes for human remains disposition? Why?
                Should the definition of ``cremation'' in the Rule be amended to
                reflect these new processes? Why or why not? How would such
                modifications affect the costs and benefits of the Rule for consumers
                and businesses, particularly small businesses?
                 c. What types of alternative containers, if any, are needed or
                required for cremation and non-burial types of dispositions?
                 d. Does the Rule's required disclosure regarding alternative
                containers need to be modified in light of new disposition options and
                the containers required? Why or why not?
                 18. Non-Declinable Basic Services Fee: Should the Rule permit a
                non-declinable basic services fee? Why or why not? Provide any evidence
                that supports your position.
                 19. Reduced Basic Services Fee for Direct Cremation and Immediate
                Burial:
                 a. The Rule defines direct cremation as ``a disposition of human
                remains by cremation, without formal viewing, visitation, or ceremony
                with the body present.'' Should the Rule be modified to expressly
                permit the addition of other goods or services for consumers choosing
                direct cremation or other newer forms of human remains disposition
                without requiring payment of the full basic services fee? For example,
                should the Rule permit a funeral provider to charge a reduced basic
                services fee for a family choosing to have a loved one cremated but
                also wishing to have a limited viewing or visitation prior to or after
                the cremation?
                 b. If changes should be made to the Rule to permit the addition of
                some goods or services to the direct cremation
                [[Page 8493]]
                or newer forms of human remains disposition arrangements without
                requiring the funeral provider charge the full basic services fee, what
                additional goods or services should be included? Why?
                 c. If changes should be made to the Rule to permit the addition of
                some goods or services to the direct cremation or newer forms of human
                remains disposition arrangements without requiring the funeral provider
                to charge the full basic services fee, should such a change also be
                made to permit limited additional goods or services to immediate burial
                arrangements? Why or why not?
                 d. How would such modifications affect the costs and benefits of
                the Rule for consumers and businesses, particularly small businesses?
                 20. Mandatory Disclosures:
                 a. Do the existing mandatory disclosures in the Rule convey to
                consumers an accurate understanding of their choices? Should any of the
                mandatory disclosures be modified to improve clarity? Why or why not?
                 b. The current embalming disclosure begins with a caveat: ``Except
                in certain special cases, embalming is not required by law.'' The Rule
                provides that this italicized language ``need not be included in this
                disclosure if state or local law in the area(s) where the provider does
                business does not require embalming under any circumstances.'' Should
                the Rule be changed to prohibit the inclusion of the ``certain special
                cases'' caveat in locations where the state or local law does not
                require embalming? Why or why not?
                 21. Funeral Rule Offender Program: What impact, if any, has the
                FTC's policy of referring first-time violators to the National Funeral
                Directors Association's Funeral Rule Offenders Program (FROP) for
                compliance review and training had on compliance with the Rule? Would
                publication of some or all of the names of those funeral providers
                participating in the FROP program increase compliance with the Rule?
                Would such publication benefit in other ways consumers shopping for
                funeral services? Why or why not?
                 22. Cemeteries:
                 a. Should the Commission broaden the Rule to apply to cemeteries?
                Why or why not? Identify any specific practices by cemeteries, such as
                failing to provide itemized price information or making any
                misrepresentations to consumers, that an extension of the Rule could
                address to protect consumers. Provide any evidence that demonstrates
                whether such practices cause consumer injury and quantify or estimate
                that injury if possible. Are any such practices prevalent? If so,
                provide any evidence, such as empirical data, studies, or reports,
                which demonstrates the extent of such practices.
                 b. What percentage of cemeteries are for-profit and therefore would
                fall within the FTC's jurisdiction? What, if any, concerns would arise
                if the Commission extended the Rule to for-profit cemeteries, but not
                non-profit cemeteries? What would the costs and benefits be to
                consumers and cemetery providers if the Commission extended the Rule to
                cemeteries? Provide evidence to support your conclusions.
                IV. Instructions for Submitting Comments
                 You can file a comment online or on paper. For the Commission to
                consider your comment, we must receive it on or before April 14, 2020.
                Write ``Funeral Rule Regulatory Review, 16 CFR part 310, Project No.
                P034410'' on your comment. Your comment, including your name and your
                state, will be placed on the public record of this proceeding,
                including, to the extent practicable, on the https://www.regulations.gov website.
                 Postal mail addressed to the Commission is subject to delay due to
                heightened security screening. As a result, we encourage you to submit
                your comments online. To make sure that the Commission considers your
                online comment, you must file it through https://www.regulations.gov,
                by following the instructions on the web-based form provided.
                 If you file your comment on paper, write ``Funeral Rule Regulatory
                Review, 16 CFR part 310, Project No. P034410'' on your comment and on
                the envelope, and mail your comment to the following address: Federal
                Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW,
                Suite CC-5610 (Annex B), Washington, DC 20580, or deliver your comment
                to the following address: Federal Trade Commission, Office of the
                Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite
                5610, Washington, DC 20024. If possible, please submit your paper
                comment to the Commission by courier or overnight service.
                 Because your comment will be placed on the publicly accessible
                website, https://www.regulations.gov, you are solely responsible for
                making sure that your comment does not include any sensitive or
                confidential information. In particular, your comment should not
                include any sensitive personal information such as your or anyone's
                Social Security number, date of birth, driver's license number or other
                state identification number or foreign country equivalent, passport
                number, financial account number, or credit or debit card number. You
                are also solely responsible for making sure that your comment does not
                include any sensitive health information, such as medical records or
                other individually identifiable health information. In addition, your
                comment should not include any ``[t]rade secret or any commercial or
                financial information which . . . is privileged or confidential''--as
                provided in Sec. 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule
                4.10(a)(2), 16 CFR 4.10(a)(2)--including in particular competitively
                sensitive information such as costs, sales statistics, inventories,
                formulas, patterns, devices, manufacturing processes, or customer
                names.
                 Comments containing material for which confidential treatment is
                requested must be filed in paper form, must be clearly labeled
                ``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
                the written request for confidential treatment that accompanies the
                comment must include the factual and legal basis for the request, and
                must identify the specific portions of the comment to be withheld from
                the public record. See FTC Rule 4.9(c). Your comment will be kept
                confidential only if the General Counsel grants your request in
                accordance with the law and the public interest. Once your comment has
                been posted publicly at https://www.regulations.gov--as legally
                required by FTC Rule 4.9(b)--we cannot redact or remove your comment,
                unless you submit a confidentiality request that meets the requirements
                for such treatment under FTC Rule 4.9(c), and the General Counsel
                grants that request.
                 Visit the FTC website to read this request for comment and the news
                release describing it. The FTC Act and other laws that the Commission
                administers permit the collection of public comments to consider and
                use in this proceeding as appropriate. The Commission will consider all
                timely and responsive public comments that it receives on or before
                April 14, 2020. For information on the Commission's privacy policy,
                including routine uses permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
                 By direction of the Commission.
                April J. Tabor,
                Acting Secretary.
                [FR Doc. 2020-02803 Filed 2-13-20; 8:45 am]
                BILLING CODE 6750-01-P
                

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