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03.26.08 Why Didn’t The FTC Amend the Funeral Rule?

Earlier this month, the FTC determined that, after reviewing written and oral comments, there was no reason to modify or amend the Funeral Rule. Many of you may be wondering why the Funeral Rule was being reviewed and why nothing changed.

  • Why was the FTC reviewing the Funeral Rule? The FTC periodically opens its various trade regulation rules for review to determine their effectiveness and impact. The Funeral Rule was opened for review in May 1999. When evaluating a regulation, the FTC asks four general questions:

  • What are the costs and benefits of the regulation?

  • Would a change in the regulation significantly benefit consumers?

  • Would complying with a change to the regulation impose a high cost on businesses?

  • Should the regulation be amended to reflect changes in the marketplace or technology?

  • Were there specific issues the FTC was exploring with respect to the Funeral Rule? Why didn’t the FTC move on any of these issues? In addition to the four general questions above, there were six specific areas the FTC was exploring. Here is a list of those issues and a short explanation of why the FTC chose not to amend the Funeral Rule to address them:

  • Issue #1: Expanding the Funeral Rule to include cemeteries, crematories, and third-party sellers of caskets, monuments or other goods. Many cemeteries operate as nonprofit organizations and therefore fall outside of the jurisdiction of the FTC. The FTC also determined that there was not enough evidence that for-profit cemeteries, crematories and third-party sellers of funeral merchandise are engaged in widespread unfair or deceptive acts or practices. Therefore, it elected not to expand the rule to include these providers.

  • Issue #2: Changing or eliminating the provision that allows a funeral provider to charge a single non-declinable fee. The FTC determined that regardless of the particular arrangements a consumer seeks, there are a number of fixed costs related to funeral arrangements for which funeral providers are entitled to be paid when their services and facilities are used. Thus, the FTC elected not to change the basic service fee provision.

  • Issue #3: Clarifying the “casket handling fee” prohibition. Casket handling fees undermine the purpose of the Funeral Rule, according to the FTC. Under the Funeral Rule, funeral providers may not charge a fee that is not for the basic services of the funeral director and staff or the specific items selected by the consumer. The FTC rejected arguments that a fee would help funeral homes recover costs associated with accepting delivery of a casket from a third-party seller.

  • Issue #4: Eliminating discount packages. The FTC did not find any evidence to support the claim

IFSA Newsletter


that discount funeral packages harmed consumers. Therefore, no change was made in this area.

  • Issue #5: Revising GPL disclosure requirements. The FTC did not see a need to alter any of the disclosure requirements because, as they stand, they provide a significant benefit for consumers. The FTC saw no need to add additional disclosure requirements and noted that additional disclosures could obscure important information.

  • Issue #6: Including preneed sale of funeral goods and services in the Funeral Rule. The FTC did not see enough evidence to prove there were widespread unfair or deceptive preneed sales practices. It also felt that state laws governing preneed were sufficient to protect consumers.

  • To read the entire explanation of the FTC’s decision not to amend the Funeral Rule, visit the Federal Register Website. Enter the text Funeral Rule in the “Quick Search” box and click “Submit.” The first document returned in the search (Regulatory Review of the Trade Regulation Rule on Funeral) contains the FTC decision.


Economic Stimulus Package Benefits Your Business

In addition to providing stimulus payments to individuals, the Economic Stimulus Act of 2008 provides incentives for small businesses. NFDA worked with other small business groups to advocate on your behalf for small business relief in the stimulus package. These incentives include a special 50 percent depreciation allowance for 2008 purchases and an increase in the small business expensing limitation for tax years beginning in 2008. Visit the IRS Website or consult your accountant for more information on how to take advantage of these special benefits.

Failure to Protect Staff from Chemical Exposure Could Lead to High Penalties

OSHA announced this month that it was imposing a penalty of $117,000 on an employer that failed to provide employees with adequate protection from exposure to ethylene oxide. Ethylene oxide is a chemical used to sterilize medical equipment in industrial and health care settings.

While the job site in question was not related to funeral service, the citations and penalties illustrate the fact that you must be aware of the hazards of all chemicals that exist on a job site. Formaldehyde is not the only regulated chemical that may be in a preparation room. You must comply with the requirements of all OSHA standards and regulations and the warnings contained on Material Safety Data Sheets for all chemicals in your funeral home.

For more information, contact the NFDA members-only OSHA Support Line, answered by the compliance experts from Stericycle, at 800-633-2674. NFDA members are also entitled to a 15-minute phone consultation on OSHA- related matters with Ed Ranier, NFDA’s OSHA General Counsel; contact Ed at 410-539-5881.

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