FTC KEEPS FUNERAL RULE LAPSES BURIED:

FTC keeps Funeral Rule lapses buried: Plain Dealing

Sheryl Harris, The Plain Dealer

 

Posted: 09/08/2012 12:00 PM

 

                                                                                                     

The Federal Trade Commission knows what its undercover investigators found in sweeps of Cleveland-area funeral homes conducted last year. The funeral homes rapped for alleged violations know what the FTC found. But you, as a member of the public, aren't allowed to know – even though the Funeral Rule was created to protect you. The agency recently denied a Freedom of Information Act appeal for more information about the sweeps and the violations.

 

Who did what? Only your funeral director knows for sure. The Funeral Rule protects grieving consumers. The rule is built around the requirement that funeral homes quickly provide consumers with price lists and allow people to choose ala carte from the list, so they can buy only the things they want. The chief problem with the rule is the secrecy with which the FTC enforces it. The FTC conducts enforcement sweeps in secret. It fines violators in secret. It even issues press releases congratulating itself on uncovering wrongdoing in the funeral industry without naming any names.

In response to a Freedom of Information Act request, the FTC agreed to release the names of 12 funeral homes it fined or sent warning letters to, but it rejected The Plain Dealer's appeal for the name of a remaining funeral home that faces a fine. The Plain Dealer also appealed the heavy-handed redaction of the warning letters the FTC sent to nine of the 16 funeral homes inspected. The agency rejected the paper's arguments that the contents of the letters should rightfully be made public.

Under a deal the FTC struck with the National Funeral Directors Association in the mid-1990s, the commission gives funeral homes accused of significant violations this choice: (a) Make a sizable "voluntarily" payment to the U.S. Treasury and pay to enter a three-year education program run by the funeral directors' association or (b) be sued by the FTC and face penalties of up to $16,000 per violation.

 

The FTC assures funeral homes that if they take the "voluntary" route, the agency won't publicly release their names. The fine print, however, notes that funeral home names may be obtained through a Freedom of Information Act, or FOIA, request. Fine print can be so tricky. Here are the few details the FTC agreed to exhume in response to FOIA requests:

 

• Three funeral homes agreed to pay fines to avoid being sued for what the FTC said were "significant violations" in two separate visits by FTC investigators posing as customers. As previously reported in this column, the FTC accused Ripepi Funeral Home in Parma, F.J. Corrigan Funeral Services in Chagrin Falls, and Mallchok Funeral Home in Parma of failing to provide FTC shoppers with price lists.

 

• A fourth funeral home also was accused of two significant violations, but the FTC won't reveal the name of that home – not even in response to a FOIA request – because the owner hasn't decided whether to pay the fine or be sued. There apparently is no deadline by which it needs to decide.

• Nine funeral homes received warning letters for what the FTC described in its letters to the homes as "serious violations of the Rule" but described in its public announcement of the sweeps as "minor compliance deficiencies."

 

The homes that received warning letters are Carey Funeral Home in Cleveland, DeJohn Funeral Home & Crematory in South Euclid, Ferfolia Funeral Homes Inc. in Maple Heights, The Gaines Funeral Home Inc. in Cleveland, Golubski Funeral Home Inc. in Parma, Humenik Funeral Chapel in Brook Park, Mandley-Vetrovsky Funeral Home in Fairview Park, Joseph C. Schulte & Mahon-Murphy Funeral Homes in Lyndhurst and Schuster-Straker-O'Connor Funeral Home in Parma.
 

The FTC has at times sent these warning letters if, for example, a price list doesn't carry a required disclosure or contains a fee the rule doesn't allow, but the letters the FTC made public in response to a FOIA request were so heavily redacted it's impossible to know what prompted the letters.  

 

It's worth noting that three area funeral homes sailed through the sweeps without any problems.
 

The FTC denied The Plain Dealer's appeal challenging the redaction of the warning letters. The agency says it withheld details because revealing that information could "disclose guidelines for law enforcement investigations."

 

Note the FTC didn't mind sharing that with the funeral homes. Its problem is sharing that information with you and me, the funeral-buying public.  THIS THEY DO NOT!

 

This is galling.

 

The FTC is a hardworking agency with a huge mission. It protects consumers from almost anything that some other agency doesn't have jurisdiction over. Just in the past couple weeks, it's mailed consumers refunds it won by pursuing robocallers that charged people's credit cards, stores that overstated price savings, marketers that overhyped their supplements, and scammers who tricked consumers into paying for leads on federal jobs.

 

In the same period, the agency sued a company that promised its videos could to teach babies to read, got a get-rich-quick infomercial yanked from the airwaves and won a settlement from marketers who exercise equipment. Under its current administration, this agency been more energetic than it has been in years.  But its dusty, furtive approach to the Funeral Rule doesn't serve anyone well. Not the agency. Not the funeral industry. And certainly not the public. Details about violations shouldn't be sealed in some crypt until the end of time. Compliance might be higher if funeral homes knew their names would be made public if the FTC found violations.

 

As it is, announcing that four unnamed homes in a city paid fines to avoid a government lawsuit casts a pall over every funeral home in a city. By making the findings more transparent, funeral directors and the public could be assured that the FTC enforces the rule fairly -- something that no one can determine with this much secrecy.

 

Certainly, the public would know whether to be more careful when doing business with certain homes. And describing real encounters that trigger warning letters and fines would give everyone a better understanding of what the rule means and what constitutes a violation.

 

 The FTC needs to breathe some life – and sunlight -- back into its enforcement of the Funeral Rule, if for no other reason, for the sake of consumers forced to make the one purchase everyone dreads.

That's the group the Funeral Rule is supposed to protect.