Exposing Funeral Home Scams

My grandmother's funeral stands out in my memory. Young and beautiful, she had died unexpectedly in a car accident at the age of 42. The funeral was elaborate. So was the casket. My mother said it was guaranteed for fifty years, that my grandmother's body would not decay.

I didn't say anything -- heck, I was only eleven. But I thought it was the best scam ever. I mean, who's going to dig it up and check? It was, indeed, a scam. In fact, it's illegal today for funeral directors to promise a coffin will preserve a body. But how was my stunned and grieving mother to know that?

Funerals are expensive, really expensive. For families whose recently departed has made his or her own plans and arranged for payment, it's not so bad. But in most cases, death comes as a surprise. This means the family, at the last minute, plans the funeral, chooses the coffin, and does everything else. The body must be buried or cremated hastily; there is little or no time to shop around, and even less desire. But that's okay, because the funeral home director is there to help you, comfort you in your time of need, and make sure you're going to be okay.

Right?

Nope. Never make that assumption.

Funeral homes are in it for a profit. A few years ago, something appalling happened: small independent, especially local, funeral homes were bought up by a few large conglomerates. Sometimes the original owners were kept on to run the place, but in most cases embalming was centralized and many other things streamlined so that the funeral home maximized its profit. And many of the owners-cum-managerial-staff quit when they realized what they were going to be doing:

Squeeze every penny out of grieving widows and children. Use their grief -- our grief -- to guilt us into spending as much money as possible on a funeral.

Not every mortician does this. But far too many of them do -- no one knows how many, because most grieving families don't even realize they've been had. But judging by anecdotal evidence and the little investigative reporting that's been done, it's common.

Morticians: Scruples of Used Car Salesmen

Modern funeral directors often work on commission, or commission plus salary. To give you an idea of how big that commission can be, caskets alone typically have a 300%-500% markup from the wholesale price. The casket is typically half the cost of the funeral, as much as $70,000 but usually several thousand. Add to that the vault, the funeral itself, the ceremony, and the hundreds of little extras you'll find yourself billed for. If phone companies did this, consumers would be up in arms. But we don't realize that funeral companies do this.

They know this. They know how our emotions take control of us when we've lost a loved one. And they take full advantage of it.

For the last decade, four giant corporations have controlled about 90% of the funeral parlors in the United States; these corporations, unlike the mom-and-pop funeral operations that prevailed a couple of decades ago, pressure funeral directors and salespeople to get all the profit they can. Across the board, they have raised prices and encouraged funeral directors to become high-pressure salespeople instead of the comforting counselors they once were.

Don't Get Scammed By Funeral Homes

The first thing that should happen when you walk through the door of the funeral home: the funeral director should give you a printed price list. It is a federal law that they must give you that price list, and you need it. Be wary if he does not, and ask for one. If he won't give you one right away, leave. Don't waste your time here. Under no circumstances should you start talking about a funeral plan if you don't have the price list.

Bring a friend with you, someone you trust who is not stunned emotionally by your recent bereavement. This person can keep you from making some terrible mistakes. Upon going into the funeral parlor, ask to use the bathroom first thing. If the toilet paper is cheap gas-station quality, just leave. If they skimp on this, they'll skimp on everything else.

For a good idea of realistic pricing, call the local government purchasing office -- city, county, metro, or whatever. Ask them what they pay for funeral services for a pauper's burial; this is a matter of public record, and they should be pretty open. That gives you a lowball estimate for a funeral. Remember, this should be low. But your quoted lowest price should not be more than double this one. If it is, you may want to go somewhere else.

Look through the price list for low-end caskets and ask to see the cheapest ones. These are usually not on display on the sales floor, which means most people buy the higher-end coffins without ever realizing there are less expensive options.

Read package deals carefully. They are often padded with services you likely have no interest in, like access to a grief library or use of parking facilities (when there's plenty of on-street parking).

Shop the Internet as well as the funeral home. You'll find markups on some items to be as high as -- sit down -- 3,000%. (And you thought the casket markup was bad!)

Never give the funeral director carte blanche. Not only will you get plenty of things you'll never use, you'll end up with the worst possible prices. Do you want a stranger to profit from your loved one's death?

When the sales staff tries to guilt you into buying a nicer coffin, more days, or whatever, don't listen to them; instead, ask yourself what your deceased loved one would want for you. That's the choice to make, every single time.

Do not sign an insurance assignment to the funeral home. If you can, put it on your credit card instead so you can deny unfair charges. Absolutely no money should pass from your hands to theirs until you have a fair, itemized contract in front of you to sign. Remember, even if you cancel everything, you may not get all your money back -- and in most states they can legally keep part or all of it if you've signed a contract. Think carefully before you ink it.

Wait before buying a monument, and shop around. While the body must be disposed of fairly quickly, a monument can wait a few weeks. Make sure you get the nicest one possible for your money. Go cheap on the casket, and spend on the monument. You'll see that monument on a regular basis, but everything else will be gone.

Take pictures of everything you buy, and compare them against what you actually get. Funeral homes sometimes substitute substandard items for your nice ones, and then claim the one you chose was sold out. If they must substitute, by law they must substitute something of equal or greater value to the one you paid for.

The Funeral Rule: Your Consumer Rights

A little-known fact is that the Federal Trade Commission has very specific rules designed to protect the bereaved heirs who must plan a funeral. This list is called the Funeral Rule, and includes items such as:

• Funeral home directors must provide a printed and itemized price list of all services.
  
• You don't have to buy whole packages; you can pick and choose the items you wish to use.
  
• You don't have to buy services you don't want, unless it is a state requirement (embalming, for example, is expensive and may not be necessary, but some states require it). If it is required, the funeral director must explain this to you. Items required by the state must be disclosed on the itemized bill, and reference the pertinent law. (An open-casket viewing will likely require that the body be embalmed, however.)
  
• Funeral parlors cannot guarantee such things as "sealed" caskets that preserve your loved one's body; the sealing of the casket has nothing to do with the decay rate of any given body.
  
• If you purchase a casket, urn, or other item elsewhere, the funeral parlor must use it at your request, and not charge you extra "maintenance fees."
  
• You are entitled to get price information over the phone.

Besides this, watch for the following scams.

• Cremation does not require an expensive coffin; an inexpensive container will do just fine. If you're being cremated quickly, there is no reason to embalm the body. And storage in the mortuary refrigerator should not cost more than twenty dollars or so a day. If they try to charge you more, call the FTC.
  
• Read your funeral plot contract. Some plots only give you the right to be buried in the cemetery. You want to have the actual deed to that little plot of land so you and your heirs have some say in what's done with the land in twenty years.
  
• Unfortunately, your pastor may not be a person to turn to. There is evidence that some pastors are in collusion with funeral home directors, and may get kickbacks. Depend on your friends instead.
  
• Don't think you have to spend the whole funeral/burial insurance policy. Do not tell the funeral home director that you have one, in fact. The less they know about your cash resources, the harder it will be for them to sell you unnecessary stuff.
  
• You do not have to view the plot or anything else the funeral home wants to sell you before buying. If they take too long, in your opinion, with planning the funeral, walk out. The longer you talk to them about buying things, the more you'll buy. It's the same tactic car salesmen use when they want you to buy add-ons.

Check with the Better Business Bureau before signing a contract. And make sure the embalmer and funeral home director are licensed in your state.

If you think you're being overcharged, call the local FTC and ask them for comparative pricing.

What About Prepaid Plans?

You might think, fine, I'll just plan and pay for my own funeral so my widow/children/partner don't have to go through this. This doesn't work, either. It turns out that there are plenty of scammers who are working on elderly people's trust and, sometimes, senility. They work with the senior, plan out the elaborate and beautiful funeral, even take the dress and shoes the customer wants to be buried in. Then the contract -- is something else entirely. In some cases, the dress and shoes are discarded rather than stored; the deceased may be buried in a body bag and a styrofoam box.

Every state has different rules about how well your money is protected in these prepaid plans. Instead of prepaying, consider opening a Totten Trust account (also called a pay-on-death account) at your local bank. This is a special savings account to be administered upon your death by a designated trustee, and from which your funeral will be paid. Your money is safe, and you don't have to worry about your heirs not being able to cover the expenses.

AARP recommends that you preplan, but not prepay, your funeral. That way, you don't get scammed, and your heirs won't have to pay a second time to ensure you get a dignified sendoff.

Prevent These Scams: Protect Your Heirs

The most important thing you can do to protect your heirs upon your death is to talk about your final plans for yourself: whether you want to be buried, cremated, or donated to science, how elaborate your funeral should be, and what your plans are to pay for the funeral. This ensures that they have all the information they need.

Under no circumstances should you sign a preneed agreement, though you can preplan your funeral with a specific funeral home. Not every funeral home exercises fraudulent practices when setting up prepaid funerals, but enough do that AARP strongly recommends against it. Preplan your funeral and sock the money away in a Totten Trust savings account to ensure your funeral is paid, but don't let that money leave your bank til you leave this earth. Besides, in a savings account it can earn interest for the many, many years you have left.

While you're preplanning things, write your own obituary, and leave it with your other funerary papers with instructions for how to place it. Funeral homes often triple the price to place this for you. Your heirs can place it themselves, and you'll have the nice things you wanted written about you right there at hand. Just remember that long obituaries can be pricey.

Last Words

The funeral business is a BUSINESS. The funeral director today is a businessman, manager, even salesperson. He is not your friend. He may be sympathetic and kind as well, but that does not mean you should trust him.

You can download a copy of the Funeral Rule brochure from the FTC website. Alternately, your local FTC office should have hard copies available for you.