As the Federal Trade Commission held final hearings yesterday on new rules governing the funeral home industry, about the only thing consumer groups and undertakers agreed on was that there was one key issue: whether and how funeral homes should disclose prices to potential customers.
But sides scored the FTC proposals which, if enacted July 22, would establish the first nationwide regulation of the funeral home industry after almost a decade of effort.
"We urge that if that is the most the commission can adopt, that no rule be adopted at all," said Bruce Terris, a spokesman for the National Council of Senior Citizens and the Americans for Democratic Action. "There are tougher laws in many states," Terris said, and he predicted that a "weak" FTC rule would make such laws difficult to preserve in the face of industry pressure.
But representatives of the nation's undertakers said strict regulations would be costly -- to undertakers and taxpayers -- as well as unnecessary in an industry they painted as increasingly self-regulated.
Since the early 1970s the funeral industry has been a principal target of consumer groups. Consumer advocates argue that since the typical funeral home customer is a bereaved relative of the deceased, the industry should come under particularly rigorous government scrutiny. For their part, the operators say that their record, if not spotless, has been no less clean than that of any other industry.
The crux of the dispute is whether undertakers should be required to break down the price of every item that goes into a funeral or whether they should be allowed to price funeral services in fixed packages that could be discounted for each item the purchaser doesn't want.Itemized pricing was backed by the FTC staff in January, but later most of the staff accepted a proposal by undertakers' groups to also allow package pricing with discounts for unused services.
Senior citizens spokesman Terris sid the industry-backed pricing proposal would "impose the burden to compute the cost of the service on . . . the grief-stricken purchaser." He also criticized packge pricing by saying it "puts pressure on the purchaser to purchase a complete package."
"What I think is that the staff wanted to do something that industry wanted," Terris said.
FTC staff attorney Pamela J. Coveney explained after the hearing why the staff decided to change its position and recommend the package pricing option. "We're just not prepared to say that itemization is the only proper route," she said. Since the staff felt that packaged pricing with discounts provides "roughly equivalent protection" as the itemized breakdown, staffers decided it would be best to allow undertakers to choose between the two options.
Under the staff's package pricing proposal, a consumer could be presented with a funeral package which contained, say, three limousines. If the consumer wanted only two, he could refer to a separate list to find the discount the undertaker offered for each limousine not used.
George J. Gonce, a Baltimore undertaker representing a group of state regulators, said state regulation is adequate to deal with abuses in the funeral industry without a stringent rule from the FTC. Gonce said that the low level of complaints received about undertakers indicates that state regulation is doing its job. "It is inconceivable," he added, "that a funeral home could long abuse the public trust and still stay in business."
Gonce also referred to studies which purport to show that funeral costs -- and prices -- rose in states which required itemized pricing.
Representing the International Order of the Golden Rule, an association of 1,100 undertakers, Dudley Rawlings took issue with as aspect of the proposed regulation that would require undertakers to quote prices over the telephone, even if customers do not request it.
"If the customer asks for information, I think we ought to be required to give it," he said. But to provide unsolicited information leads to "a non sequitur or nonhelpful type of conversation."
Consumer groups have pressed for the provision, arguing that telephone shopping is essential to effective price competition, because after a body is actually taken to a funeral home it is only rarely moved to another.