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Senate Investigates Fraud in Funeral Industry

Wed, 04/12/2000 - 12:00am — Karen Stevenson
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The leaders of the Special Committee on Aging, Sen. Chuck Grassley, chairman, and Sen. John Breaux, ranking member, decided to investigate consumer issues in the funeral and cemetery industries. They held a two-day hearing on April 10-11 to educate consumers about the industries, to expose bad practices, and to explore the extent of consumer satisfaction.

Paying for funeral services can put consumers in a vulnerable financial position. Grieving consumers often do not shop around for a funeral home or cemetery, as they would with other major purchases, and they may be susceptible to heavy-handed sales pitches. In addition, the industries are inconsistently regulated, creating openings for unscrupulous opportunists to prey on consumers. The nation's funeral homes and cemeteries handle almost two million funerals and burials a year. and represent a $12 billion industry. The average cost of a funeral, burial and monument is $7,520.

The testimony they hear disclosed tremendous problems in funeral industry practices. One example was a 80-year-old Florida widow who was hounded three times in the two months after her husband's death by a sales person selling a "pre-need" package for her own death. The sales person persuaded her to purchase over $125,000 in expensive and unneeded funeral goods and services, including a copper casket and copper vault, statues, a full-body monument, a second casket costing nearly $40,000 casket, and a family mausoleum, all in spite of the fact that she had no family left to attend the funeral or visit the mausoleum.

Witnesses testified to a number of other problems. For example, pre-need contracts are promoted to "protect yourself against inflation" when prices have actually been dropping in the last few years. "Pre-need" contracts are not portable, so people cannot take advantage of them when they move. The ashes a family receives after a cremation may sometimes include those of the deceased family member, or the remains of other people. The harvesting and sale of body parts is also a problem when bodies are cremated, since there is no way to ensure that the whole body was cremated.

The leaders of the Special Committee on Aging, Sen. Chuck Grassley, chairman, and Sen. John Breaux, ranking member, decided to investigate consumer issues in the funeral and cemetery industries. They held a two-day hearing on April 10-11 to educate consumers about the industries, to expose bad practices, and to explore the extent of consumer satisfaction.

Paying for funeral services can put consumers in a vulnerable financial position. Grieving consumers often do not shop around for a funeral home or cemetery, as they would with other major purchases, and they may be susceptible to heavy-handed sales pitches. In addition, the industries are inconsistently regulated, creating openings for unscrupulous opportunists to prey on consumers. The nation's funeral homes and cemeteries handle almost two million funerals and burials a year. and represent a $12 billion industry. The average cost of a funeral, burial and monument is $7,520.

The testimony they hear disclosed tremendous problems in funeral industry practices. One example was a 80-year-old Florida widow who was hounded three times in the two months after her husband's death by a sales person selling a "pre-need" package for her own death. The sales person persuaded her to purchase over $125,000 in expensive and unneeded funeral goods and services, including a copper casket and copper vault, statues, a full-body monument, a second casket costing nearly $40,000 casket, and a family mausoleum, all in spite of the fact that she had no family left to attend the funeral or visit the mausoleum.

Witnesses testified to a number of other problems. For example, pre-need contracts are promoted to "protect yourself against inflation" when prices have actually been dropping in the last few years. "Pre-need" contracts are not portable, so people cannot take advantage of them when they move. The ashes a family receives after a cremation may sometimes include those of the deceased family member, or the remains of other people. The harvesting and sale of body parts is also a problem when bodies are cremated, since there is no way to ensure that the whole body was cremated.