As my first post of the New Year I find it imperative that I look into the world of Death Care, Funeral, and Cremation business with a perspective of change that is happening all around us.  And, when I look at that change, I think in our Death Care world, as well as the rapid changes in our nation and world in general, the implications are passing the Federal Trade Commission (FTC) and their review of the “Funeral Rule” by.

The “Funeral Rule” was put into law in April 1984 as a mandate for consumers to be able to compare and look at prices of funeral and cremation services without having to commit to those services by a funeral home for a deceased loved one.  It was seen as a much needed tool for consumers in their selection of a funeral/cremation service provider.  The FTC was the regulatory agency that was selected to handle the implementation and enforcement of the rule.

Tom Anderson
Funeral Director Daily

In my opinion, almost since the very inception of “The Rule” in 1984 it has not done what it was intended to do.  That’s partly because it was complicated in nature and used a Death Care vocabulary of services that the public was not well versed in.  And secondly, almost since its inception, America started turning from a world of funerals to a world of cremations.  I’m not so sure that the FTC saw that coming.

For the record, I’m not against regulation and consumer protection.  But, I’m afraid if the FTC comes up with a final revision of the rule going forward in the near future, they will be in the exact same position  — authors of a rule which is already behind the times.

I say that because consumers purchase things in different ways today. . . .a process that is continually evolving.  And while, at least to me, the FTC has concentrated their review partially on the availability of consumers to see prices on the internet — internet purchasing is only one of the ways that things are changing in the Death Care business.   From what I understand, so much of the FTC’s vision has been focused on website and internet purchasing that they may be missing part of how consumers are buying Death Care services.  (More on that in an upcoming column).

Another reason I suggest a slow-down of any FTC decision is the recent (June 2024) decision by the United States Supreme Court known as the “Chevron” decision.  The ruling “struck-down” an old precedent that gave the FTC much more power in these types of regulations.  That 2024 decision which is defined like this —  “The Chevron doctrine was a 40-year-old Supreme Court precedent that required courts to defer to regulatory agencies when interpreting ambiguous laws” —  probably means that one might question what can the FTC do as to funeral home regulations when there is no clear-cut Congressionally passed law to back their regulations.

Finally, come January 20, 2025, there will be a new Presidential administration in Washington, DC.  If you believe what you read, this administration will be more open to less regulations in business and industry.  Here’s a recent article from Reuters about that titled, “Trump names Andrew Ferguson to head the Federal Trade Commission”.

Again, I’m all for consumer protections. . . . but, with what we now know about the changes in consumer behavior, the Supreme Court “Chevron” ruling, and the change of administration in Washington, DC, I think it would be a mistake for the current FTC to move “full-speed ahead” without acknowledging that if they do, their rule will more than likely be “obsolete” in reality the minute it is printed.

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Breaking News: FTC Issues Report on Undercover Phone Pricing Sweeps

Today FTC Staff issued a report on the Commission’s undercover Funeral Rule phone sweep it conducted in 2023 (www.ftc.gov/system/files/ftc_gov/pdf/staff-report_-calling-for-funeral-services.pdf). The report presents the FTC’s findings on its ability to obtain price information from funeral providers by phone from the agency’s first-ever undercover Funeral Rule phone sweep.

About the Phone Sweep

As you are aware, the FTC placed calls to 278 funeral providers from February through December of 2023. For each of the randomly selected funeral providers, there were three attempts to reach the provider by phone during business hours (9 a.m.-5 p.m.), and up to three attempts outside of business hours. On the calls, FTC staff asked for pricing information, typically for direct cremation, cremation and a memorial service, and cremation with a viewing.

Key Findings of the Report

The FTC’s report asserts that they were “unable to obtain price information after business hours” from 26% of the funeral providers they called (73 providers), and that they were unable to obtain price information from 7% of the providers during business hours (21 providers).

The report also shows that in many instances, multiple calls were needed to obtain price information from a funeral provider. After business hours, staff either had to call more than once or wait for a return call from nearly 70% of the funeral providers called during the sweep. During business hours, staff had to call multiple times or wait for a return call for about 30% of the funeral providers called.

Finally, the report details that half of the funeral providers called answered at least some questions about pricing with estimates or ranges, rather than actual prices. The report also notes that at least 33% of the funeral homes provided package pricing for at least one service on a call (such as cremation with a viewing), without giving itemized price information for that service. In addition, staff found that at least 37 funeral providers quoted different prices for the same services on different calls.

While the FTC has previously reported on this phone sweep, this report is focused on how long it took to get the information and how many times they had to call. Remember, many of the findings listed above, in and of themselves, are not violations. It is generally acceptable to use an answering machine, have non-licensed personnel defer to licensed individuals to provide the information, and have a policy of only providing the required information during business hours (see more on the requirements below).

Indeed, this report appears to be intended to advance the position that requiring funeral providers to post their prices on line, where they would be available to consumers 24-7, is beneficial to consumers.

How to Protect Your Firm

NFDA published a Legal Alert on the FTC’s telephone sweep in February 2024 when the results were initially announced. We reminded our members that while nothing has changed with regard to the Funeral Rule or its enforcement, there were several elements to remember now that the FTC has appeared to shift its enforcement procedures from in person to via telephone:

• You must give accurate information from your General Price List, Casket Price List, and Outer Burial Container Price List to anyone who telephones and asks about your prices or offerings.
• You cannot require callers to give their names, addresses, or phone numbers before you give them the requested information. You can ask callers to identify themselves, but if they refuse to do so you still must answer their questions.
• You cannot require consumers to come to the funeral home in person to get price information.
• You can use an answering machine or answering service to record incoming calls. However, you must promptly respond to questions from callers on an individual basis.
  • As an example: Your answering machine can have a message telling consumers to call a specified number during business hours for information about prices and offerings. You need to provide the requested information when consumers call during those hours or you can have an answering machine or answering service take consumers’ names and phone numbers so that you can return the calls at your earliest convenience.
• You may have a (non-licensed) employee answering your phones respond to easier questions regarding your offerings and prices by referring to the printed price lists, but the employee must refer more difficult questions to a licensed employee. If a licensed employee is unavailable when the call comes in, the employee can take a message so a licensed employee can return the call later.
• You do not have to give price and other information after business hours if it is not your normal practice to do so. You can tell consumers who call during non-business hours that you will provide the information during regular business hours. However, if a consumer calls after hours to inquire about an at-need situation, and it is your practice to make funeral arrangements during non-business hours, you should provide price or other information the consumer requests.
• You must give certain information to people who telephone, but the Rule does not require you to send callers a General Price List. Similarly, you do not have to send a GPL in response to mail inquiries about funeral goods and services. Of course, you certainly are free to send a GPL to someone who calls or writes for information if you wish to do so. However, if a telephone or mail inquiry is followed up by a meeting at the funeral home or elsewhere, you must provide a GPL at that time.
• The FTC has also noted that they consider it a violation for a funeral home to promise to send a General Price List, but instead only provide a list of package prices that did not meet the requirements of a GPL. It is always important to remember, whether in person or on the phone, you must not misrepresent any law or requirement.

It is also important to note that some states require funeral providers to mail a price list upon request. You should check to see what the requirements are in your state.

Finally, we recommend asking at the end of the conversation with any caller asking about your prices or offerings, “do you have any additional questions” or “is there any other information I can provide you.” This catch-all will help to ensure you are in compliance and there was nothing left unanswered.

While the change in administration in the White House and recent Federal court rulings stemming from the US Supreme Court’s decision in Loper-Bright will certainly affect the FTC and its current review of the Rule, it is too early to determine exactly how. While this report seems to indicate the FTC is currently charging ahead on its current path, an anticipated new chair of the FTC will certainly result in some alteration.

Rest assured, NFDA has been – and will continue to be – your steadfast advocate in Washington, D.C., ensuring the voice of funeral service is heard. We are closely monitoring every development and engaging directly with the FTC to protect your interests and those of the families you serve. We’re watching this issue like a hawk and will keep you informed of all relevant updates as they happen. Your NFDA team is here for you every step of the way.

The FTC Chair is Worried Airlines Will Use AI to Target Bereaved Travelers

Like it or not, artificial intelligence (AI) is here, and little by little, it’s infiltrating deathcare. For the most part, this is a good thing, as AI-powered tools like Tribute’s and Passare’s obituary writers free up time in your day and AI bots can help to ease the grieving process for the families you serve. However, the chair of the Federal Trade Commission (FTC) is worried those same bereaved families may become targets of price manipulation thanks to AI technology … and the airlines.

Manipulating the bereaved

On September 19, FTC chair Lina Khan spoke about her fears of AI misuse at Fast Company’s 10th Annual Innovation Festival. As she warned about the AI-assisted acceleration of online scams and new frauds like voice cloning, Khan also brought up the potential of price discrimination. For that reason, Khan worries that airlines could begin using AI to jack up airfares for passengers they’ve determined are traveling to attend funerals. 

According to Business Insider, Khan explained that companies could easily enable AI to gather personal data then use that information to selectively increase prices. She used examples such as charging people with nut allergies a higher price for nut-free granola bars, or restaurants creating personalized menus with QR codes. Most concerning for deathcare, though, is what Khan said next.

“Or somebody being charged more for an airplane ticket because the company knows that they just had a death in the family and need to fly across the country,” Business Insider quoted Khan as saying.

Surge vs. surveillance

Price manipulation like this is different from surge pricing, Khan explained. She added that the FTC is already investigating surge, or dynamic, pricing, which means raising prices to capitalize on high demand, like summer rates for beach condos or higher ride-sharing rates when fewer drivers are available. 

Khan said the concept of using personal data to selectively increase prices is known as “surveillance pricing,” and would involve firms like airlines or restaurants using the vast amount of information amassed by digital companies during every online interaction.

With the airline example, determining who is traveling to attend a funeral would be rather straightforward, even though only a handful of airlines still offer bereavement fares. Using AI, airlines could pull information from a traveler’s social media accounts to see if they’ve posted about a death in the family; they could use their search history to find out if they’ve Googled the funeral home location; a scan of their financials could reveal a purchase of a memorial tree or floral arrangements; they could even scan the deceased’s obituary for mentions of the traveler’s name.

Tech inquiry and digital shelf tags

As the youngest FTC chair in history, Khan has already built a “reputation for going after Big Tech,” says Fast Company. Although there is no official FTC investigation into surveillance pricing, the organization recently requested information from eight major companies on how they use consumers’ personal data in four areas, including product and service decisions and pricing. The results of that inquiry are still pending, Khan says.

Khan is also concerned that the public’s general acceptance of surge or dynamic pricing may make people less resistant to surveillance pricing, if they even notice it at all. Surge pricing is being implemented in more and more industries and situations. Business Insider found that Wendy’s plans to implement digital menu boards for “‘suggestive selling based on factors such as the weather,’ like pushing a cold Frosty on a hot day.” They also reported that Walmart plans to implement digital shelf tags next year, although a spokesperson told them those would “not be used to surge prices during high demand.”

Khan, says Business Insider, hopes her inquiry will determine what AI-enabled surveillance pricing is occurring and how it will impact consumers. 

“Because we, I don’t think, want to wake up one day where this is just now the new normal,” she said. “We want to be able to figure out: is this really an economy and society that we want to be living in, or do we want some guardrails there.”

Join Johnson Consulting Group on Friday March 15th at noon Central Time for an essential webinar about the new requirements under the FTC Funeral Rule.

This webinar entitled, “Mastering FTC Funeral Rule Compliance”  will be hosted by Johnson Consulting’s Nelson Thulin and also feature Poul Lemasters and Nicole Wiedeman.

Here’s what the registation form says about the program:

“(The webinar) will provide invaluable insights into understanding and complying with complex new regulatory requirements under the FTC Funeral Rule. From speculative timelines to training solutions, this webinar will equip you with the knowledge and strategies needed to ensure compliance and avoid potential challenges.”

To learn more and/or register click here.

To learn more about how Johnson Consulting Group may be able to help your business click here.

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