Birmingham News (AL)
FTC'S FUNERAL RULE AIDS PLANNING IN TIME OF GRIEF

February 29, 2004
Section: Business
Page: 1-D

JEFF HANSEN News staff writer

Last fall, Sandra Holliman had to purchase funeral services for her 76-year-old husband after he unexpectedly died.

Though she said the salesman at Southern Heritage Funeral Home had a professional manner, she found his talk about prices of services and caskets confusing. And when he listed on her purchase agreement a $350 charge for flowers she did not want and a $245 charge to drive flowers one-third of a mile from the funeral home to the cemetery, Holliman - herself a flower delivery driver for Hoover Florist - said, "That's outrageous."

Then she turned and told her daughter: "I just want to get out of here."

By the time the Pelham woman left, she had a purchase agreement to pay $7,874 for her husband, Walter's, funeral, but little understanding of how that bill was made up.

She and her employer, Bebe Morgan, later complained to the Alabama attorney general's office and the Federal Trade Commission, and Holliman got a refund of $350 for the unused flowers.

Like many consumers, Holliman was not prepared for the day she had to plan her husband's burial.

Southern Heritage is operated by Houston-based Service Corporation International, which calls itself the largest provider of funeral and cemetery services in the world.

In the metro Birmingham area, Service Corporation International also operates Southern Heritage Cemetery, Lackey Floral, Ridout's-Brown-Service Roebuck Chapel, Ridout's Valley Chapel, Johns-Ridout's Mortuary-Elmwood Chapel, Elmwood Cemetery and Mausoleum, Johns-Ridout's Funeral Parlor, Highland Memorial Gardens, Ridout's Forest Hill Cemetery, and Ridout's Forest Crest Cemetery. Service Corporation International also has seven funeral homes or cemeteries in Montgomery, five in Tuscaloosa and four in Mobile.

Altogether, Service Corporation International operates 2,236 funeral service locations, 429 cemeteries and 190 crematoria in the United States and seven other nations. Catherine Colbert, a business analyst for Hoover Inc., has said Service Corporation International is to death as H&R Block is to taxes. Unfamiliar territory

For the consumer, on the other hand, buying funeral services is an unfamiliar business transaction. Consumers may arrange a funeral once every 15 years on average, and many - like Holliman - make the purchase while feeling grief and a sense of urgency.

To help consumers get clear information, the Federal Trade Commission developed regulations commonly called the Funeral Rule. Funeral homes must offer customers a general price list that helps them pick and choose certain services. The Funeral Rule also prohibits a variety of unfair or deceptive practices, and it requires funeral homes to accept, at no extra fee, caskets or urns that the consumer has bought elsewhere.

FTC guidelines to funeral homes say that early in the business transaction, funeral homes "must physically offer consumers a General Price List that they can keep and take home with them."

Holliman said she was never offered or given the price list, and she said her daughter has the same recollection. Mike Hauser, market director for Service Corporation International in the Birmingham area, disagrees with that.

"I talked to the director who handled the arrangement, and he said he did give her a general price list," Hauser said. "He said he always gives it to them before he goes in the arrangement room . . . I am confident there is nothing illegal happening and everything is in accord with federal and state law." Hauser also said his company follows all FTC regulations.

The general price list from a Service Corporation funeral home on Southside lists individual funeral services and goods. The nine-page document also lists a series of trademarked "Dignity Memorial" packaged funeral or cremation plans. The funeral package price includes the services, a selection of caskets and vaults, as well as Holliman's unwanted flowers and items like a picture frame, 100 acknowledgment cards and access to a 24-hour compassion helpline.

Holliman's final purchase agreement with the funeral home first itemized all of her individual goods and services, at prices taken from the general price list. The total was $9,459. Beneath that, under a section called "Other," the funeral director subtracted $1,585, and wrote next to it, "Tribute Savings."

What Holliman had bought was a package called the "Dignity Memorial Tribute Funeral Service Selection." She said it was unclear there was any package until she questioned some of the itemized prices, especially for flowers. Package plans

Brenda Mack, an FTC spokeswoman in Washington, said funeral homes can offer packages and can deny substitutions from that package.

"We don't try to say what funeral homes should be charging," Mack said. "We say the consumer must be informed up front. They have the right to pick and choose."

Hauser said the package plans provide benefits and value for customers, but substitutions are not allowed. In reports to investors and in filings to the federal Securities and Exchange Commission, Service Corporation International says its package plans can add revenue. Compared with non-Dignity plans, the company said, the Dignity Memorial packaged cremation plan adds $1,700 of revenue per cremation service, and the Dignity Memorial packaged funeral plan adds $2,700 of revenue per funeral service.

The four Dignity Memorial package plans offered by Service Corporation range from $7,595 to $12,795, according to the price list from Johns-Ridout's Funeral Parlor. Holliman had the lowest priced plan (her additional costs on the purchase agreement were for obituary notices and music).

If the general price list only gives the range of prices for caskets and outer burial containers, the funeral home must also offer a casket price list and an outer burial price list when it begins discussing those items with the buyer, and before showing the buyer any of the caskets or containers. "Customers must be able to look at the price list before discussing their options or seeing the actual caskets (or containers)," the FTC says in its guidelines to funeral homes. "Consumers should not first learn of casket prices by entering the casket showroom and reading price cards placed on individual caskets or by having the funeral director recite such information orally."

The FTC also says consumers must be allowed to buy caskets and outer burial containers elsewhere, and the Internet has made it much easier to shop for such items. Southern Heritage's listed prices for Holliman's casket ($2,245) and outer burial container ($1,795) totaled $4,040. Through the Internet, the same casket and outer burial container could be bought (including rapid shipping to the funeral home) for a total of $1,958 at Florida Funeral Home's casketinfo.com or for $2,140 at Funeral Depot.

The Federal Trade Commission's consumer guide on funerals can be found on the Internet at www.ftc.gov/bcp/conline/pubs/ services/funeral.htm.

Sandra Holliman, above, a driver for Hoover Florist, and her boss, Bebe Morgan, complained to the Federal Trade Commission about charges associated with a funeral for Holliman's husband.

NEWS STAFF/STEVE BARNETTE