The American Way of Death Revisited (29 page)

At the time, I thought this incident did raise some troubling questions: How many potential funeral shoppers would have the gumption of Mr. H., the tenacity to make a complaint to a government agency, and to a writer whom he had never met? Should one have to go to the expense of a phone call to Washington, D.C., to resolve the difficulty? But at least, thanks to the intervention of Commissioner Bailey, there was every reason to believe that the FTC staff members would never again treat a correspondent with a legitimate complaint in this patronizing and dismissive manner. Not so, as it turned out.

I remember once asking an editor at
Life
magazine what happens when the subject of an article complains that he or she has been misquoted, maligned, or otherwise unfairly treated by the mag. “Well, the first thing we do is to fire Murphy, and this usually satisfies the aggrieved party,” he explained. Murphy, of course, doesn’t exist except for the purpose of getting fired to placate an irate reader.

Ten years after our efforts on behalf of Mr. H., I discovered that Commissioner Bailey and I had been victims of a similar stratagem: evidently the alleged “appropriate admonishment” of some imaginary staff member was a convenient fiction adopted to shut us up.

In February 1995 I sought out Gerald Wright, the attorney responsible for enforcing the Funeral Rule in the San Francisco regional office of the FTC. What would happen today, I asked him, if an individual
wrote to his office with a complaint like that of my long-ago Palo Alto correspondent? Mr. Wright produced a form letter, dated February 3, 1995, which read:

Plus ça change
 …

Further on enforcement, Mr. Wright told me that from 1984 to February 1995 there had been a total of thirty-eight cases “formally filed” against funeral directors; of those, only two had gone to trial. Fines imposed for violations range from $10,000 to $100,000; the average is about $30,000.

He estimated that it takes eight months to a year to finish a case. An average of a little over three cases a year for eleven years seemed very slim pickings. I asked Mr. Wright how the assignments for any given FTC project are handled—how much staff time would be allotted to enforcing the rule? Reverting to the bureaucratic idiom of his calling, he explained that the FTC employs some six hundred attorneys nationwide and three hundred economists; “about half of them will cover consumer protection measures. When you get down to enforcing the Funeral Rule, maybe two work years out of six hundred will be delegated to covering that particular rule,” but he was unable to estimate how much time he personally devoted to enforcing the Funeral Rule.

In 1990 the FTC, after a review by its Bureau of Economics Analysis, concluded—to no one’s surprise—that “the Rule has not contributed to a general reduction in the price of funerals.” By a subsequent series of capitulations to industry lobbyists, the agency has abandoned any pretense of consumer protection and has cleared the way for an era of unprecedented profitability.

In June 1994 the commission adopted an amendment to the rule to permit sellers to add their overhead to a nondeclinable fee, to cover a laundry list of items such as insurance, taxes, staff salaries, maintenance of common areas including the parking lot, and, not least, an unrestricted allowance for profit. The FTC thereby, in a single
stroke, obliterated the import of itemization and the consumer’s right to choose established only a decade earlier. Package pricing, under the guise of the now FTC-endorsed nonnegotiable fee, has come back with a vengeance, and with it, for the funeral director, an exhilarating upward spiral of prices and profits.

The added fee is another device to enable the funeral seller to further confuse his already befuddled customer. In the bad old days—before there was any FTC rule and when package pricing was the norm—the consumer at least knew that the price of the casket was the cost of the entire funeral. Now, however, the standard general price list looks like this:

To this must be added the cost of the casket—quoted by this mortuary in the $500 to $25,000 range—and the cost of the outside burial container or vault (required now by almost all cemeteries)—quoted range, $525 to $6,500.

The price list of the Pumphrey Funeral Home, Washington, D.C., is taken as an example because its prices fall within the middle range nationwide.

If the price of the cheapest steel casket—$2,000—is added, the funeral director’s bill comes to $5,375—exclusive of cemetery and outer container costs.

In the Houston, Texas, area, for example, the identical goods and
services (cemetery and vault charges not included) can be had for as little as $1,585 or as much as $8,420.

The FTC makes no effort to ascertain whether funeral establishments are complying with the rule, Mr. Wright told me. However, in scattered parts of the country there are stalwart souls, mostly unpaid volunteers, who for some reason—often a firsthand run-in with an undertaker—have become obsessed with righting the wrongs inflicted by the industry. Such a one is Lisa Carlson, longtime consumer advocate on funeral issues and active in the nonprofit Vermont Memorial Society.

Vermont, with about five thousand deaths a year, is blessed or afflicted—depending on one’s point of view—with seventy funeral homes to handle these, meaning that each “home” averages just under 1.4 customers a week. In 1994 Lisa Carlson conducted a price survey covering 87 percent of the state’s funeral establishments: she found that
none
were in full compliance with the FTC’s Funeral Rule. After the FTC announced its new watered-down rules, the price situation deteriorated fast. In 1995 Ms. Carlson wrote a furious letter to the FTC saying that “the changes have left consumers at serious risk” and had “effectively gutted consumer protection,” since the new Funeral Rule now permits “bundling” of charges that the original rule had banned. Statewide, the already bloated nondeclinable fee had increased 28 percent in the year after the rule was amended. She cited the case of a Swanton woman whose mother’s funeral in 1993 cost $2,900. When her father died in June 1995, the identical funeral was billed at $7,100.

Five months after Gerald Wright had assured me that the FTC makes no systematic effort to discover whether funeral establishments are complying with the rule, suddenly—surprise, surprise—on July 6, 1995, the FTC came out with guns ablazing in the form of a press release headlined
NATIONWIDE CRACKDOWN ON FUNERAL HOMES THAT FAIL TO PROVIDE REQUIRED CUSTOMER INFORMATION LAUNCHED BY FTC WITH STATE ATTORNEYS GENERAL
. Jodie Bernstein, director of the FTC’s Bureau of Consumer Protection, is quoted as saying that “the Commission has joined forces with state Attorneys General to switch from targeting violators based on complaints to a proactive approach designed to send a no-tolerance message and follow it up with quick and sure enforcement action.”

The proactive approach, it develops, was to send “test shoppers
into funeral homes in a given area to determine whether the homes provide consumers with copies of itemized price lists.” This, of course, is precisely what Lisa Carlson and memorial society colleagues around the country had been doing for years while the FTC was soundly sleeping (in fact, of the thirty-eight actions against violators resulting in fines since promulgation of the Funeral Rule fourteen years ago, over half had been turned in by members of the consumer funeral watchdog group).

So far so good, although when one reads further it turns out that the crackdown wasn’t all that nationwide, since it involved only seven of Tennessee’s 436 funeral homes, all in Nashville; nor was it all that much of a crackdown, as only three were fined, ranging from a measly $4,000 to $16,000—sums that could handily be recouped by the funeral homes from the profits of a funeral or two.

For the next six months the FTC, perhaps exhausted from its efforts in Tennessee, lay low and said nothing. On January 16, 1996, there came another press release stating that five of Florida’s 794 funeral homes—all in Tampa—were the latest to be identified in the FTC’s response to low compliance: a nationwide “crackdown.” Four of these received fines ranging from $4,000 to $35,000; one escaped any penalty by pleading poverty. The next episode in the great nationwide crackdown came shortly thereafter, when the FTC announced a “sweep” conducted in the Delaware area. This netted five violators, four of whom were fined from $3,200 to $7,700, and the fifth again let off because of the defendant’s “financial situation.”

This, then, was the sum total of the “nationwide crackdown,” which in the course of a full year had managed to miss forty-seven states altogether, had discovered no more than seventeen of the nation’s funeral homes in violation (although the FTC had reported in 1990 that less than 30 percent of all mortuaries nationwide were in compliance), and had recovered a total of $104,000 in fines.

The question remains: Why, after years of inactivity, was the “nationwide crackdown” suddenly announced in 1995? Whose idea was it?

According to Tom Cohn, one of the FTC lawyers in charge of the “sweeps,” these questions cannot be answered: “That is not public information,” he said. One could, of course, speculate that somebody—or bodies—in the FTC had begun to feel a wee bit nervous about renewed public scrutiny: Lisa Carlson and her assiduous surveys;
parallel activity in many parts of the country by other consumer advocates; a documentary about funerals on “20/20”; my interview with Gerald Wright, plus numerous calls to the FTC by Karen Leonard, my persistent research assistant.…

Was the FTC’s tepid burst of activity intended to assure Congress and the consumer watchdogs generally that the commission was in the arena protecting the public interest? Or was it nothing more than a maneuver to distract attention from the agency’s shameful failure to take even a single step to curb the fraud and criminal misconduct that have become endemic in an industry engaged in fixing prices at ever higher levels and profiteering at the expense of bereaved families, and that has misappropriated hundreds of millions of dollars in funds entrusted for prepayment of funerals and cemetery property?

Here, for once, was government action which produced no outcry from the industry. The reason became clear when the
Funeral Monitor
, a privately circulated offshoot of
Mortuary Management
, in its January 29, 1996, issue reported:

Apparently that somebody was none other than the NFDA itself, for an FTC release of January 19, 1996, announcing the plan, says:

Under the new plan, no longer will funeral homes be subject to a fine for violating the rule. The FTC release states that “funeral homes
that failed to give test shoppers the general price lists may have the option to enter the Funeral Rule Offenders Program. Under the program, the funeral home will make a voluntary payment to the U.S. Treasury that is lower than the civil penalty the FTC can obtain for Rule violations.… Funeral home participants will benefit from reduced legal fees, reduced and tax-deductible payments to the Treasury, and free training.”

So much for the FTC’s official concession. The
Funeral Monitor
’s account is a far better read, and it includes some significant items omitted from the FTC’s announcement for public consumption. Here we learn that

No wonder that NFDA executive director Robert Harden exultantly told the
Monitor
, “These programs create a win-win situation!”

But will the FTC be able to assure the anonymity of its favored offenders—known now only as “FROPees”—under its Funeral Rule Offenders Program? Not if the ever-troublesome band of “Memorialites”—as one industry writer has dubbed them—has its way. Exercising rights under the Freedom of Information Act to obtain the names of FROPees, the Funeral and Memorial Societies of America (FAMSA) is posting the names of offending funeral homes on its Web site: www.funerals.org/famsa/frop.htm.