NPR News Investigations
You Could Pay Thousands Less For A Funeral Just By Crossing The Street
Ellen Bethea at her home in Jacksonville, Fla. After her
husband died, she paid $7,000 for her husband's cremation and funeral.
She was unaware that the same company offered the same cremation
services for much less.
Ellen Bethea sat alongside her husband's hospital bed after doctors told her that Archie, the man she had been married to for almost five decades, wouldn't make it.
"As soon as everybody else was asleep and I was sitting there with him, he passed on," she remembers. "So I think he kind of waited for me to be with him."
Bethea says her husband had several health problems and died of liver disease.
Later that day in November 2015, the staff at the hospital near her Jacksonville, Fla., home asked Bethea something she hadn't prepared for: Which funeral home did she want to use?
Bethea had never planned a funeral before, but knew of only one in town — Hardage-Giddens Funeral Home of Jacksonville. Some of her family and friends had used it and, she said, it had a good reputation. She and her family went there the next day.
After meeting with a staff member, they walked out with a bill of over $7,000.
Bethea provided a copy of the itemized funeral bill to NPR. One thing quickly stood out, but only if you know something about Jacksonville's funeral market.
The cost of Archie's cremation — $3,295 — was more than twice the amount charged elsewhere in Jacksonville by the company that owns Hardage-Giddens. The cremations are done in the same place and in the same way.
In a months-long investigation into pricing and marketing in the funeral business, also known as the death care industry, NPR spoke with funeral directors, consumers and regulators. We collected price information from around the country and visited providers. We found a confusing, unhelpful system that seems designed to be impenetrable by average consumers, who must make costly decisions at a time of grief and financial stress.
Funeral homes often aren't forthcoming about how much things cost, or embed the information in elaborate package deals that can drive up the price of saying goodbye to loved ones.
Ellen Bethea holds a picture of herself and her late husband, Archie.
In Jacksonville, Hardage-Giddens and several other businesses in and around Jacksonville are part of a large, corporate-owned portfolio of about 1,500 funeral homes and several hundred cemeteries.
The owner and operator is Service Corporation International (SCI), a multibillion-dollar company traded on the New York Stock Exchange.
The Houston-based firm claims 16 percent of the $19 billion North American death care market, which includes the U.S. and Canada. Company documents say it has 24,000 employees and is the largest owner of funeral homes and cemeteries in the world.
In Jacksonville, SCI sells cremations under the Hardage-Giddens/Dignity Memorial brand at large, luxurious funeral homes.
The company also sells them for lower prices at strip-mall storefront outlets under other brands such as Neptune Society and National Cremation Society.
In communities around the country, it's common to find wide swings in prices for funeral services.
"That to me, starts to cross a line into consumer deception," says Joshua Slocum, executive director of the Funeral Consumers Alliance, a death care industry watchdog group based in Burlington, Vt.
Slocum was talking generally about markets such as Jacksonville, where a company's centralized crematory handles remains from a variety of differently branded outlets — from posh funeral homes to humble storefront cremation societies.
The cremations are all the same, but some will cost much more than others, depending on where the consumer made the arrangements, and which of the company's brand names appears on the invoice.
"You only get that lower price for the cremation society if you happen to know that it exists and is owned by the same business," Slocum says. "I'm not saying they're doing something illegal, but I am questioning whether or not we can really say, 'Oh, they give a much higher level of service.' "
The front of 517 Park St., a crematory that serves
multiple funeral homes. The building is located between downtown
Jacksonville and the Riverside neighborhood.
Funeral Shopping Tips
As a consumer, you're likely at a significant disadvantage, and it's not just because of your emotions. Prices are seldom online and it's hard to know what to ask. Based on NPR's reporting and tips from Funeral Consumers Alliance and the Federal Trade Commission, here are ways you can help level the playing field:
As a consumer, you're likely at a significant disadvantage, and it's not just because of your emotions. Prices are seldom online and it's hard to know what to ask. Based on NPR's reporting and tips from Funeral Consumers Alliance and the Federal Trade Commission, here are ways you can help level the playing field:
- Ask for prices of the specific items you want to buy. The federal government requires that 16 standardized goods and services appear on every funeral home's general price list.
- If a loved one is near death, start looking at options in advance, when you're not under pressure to make a decision. Make calls to funeral homes or drop by and ask for a general price list.
- If planning your own funeral, put your wishes in writing and discuss them with your family. Ask for itemized price quotes from the funeral homes you visit.
- When visiting a funeral home, bring along someone trustworthy, who is not grieving.
- Don't disclose financial information about your inheritance or the size of your loved one's insurance policy until you have settled on how much you will pay.
- Know the boundaries of your relationship with a funeral director or salesperson. While they may be empathetic, their first responsibility is to their business' success. Also, salespeople may be working on commission, so they may have an interest in your paying as much as possible.
"Direct cremation is the same no matter where you go," says Slocum. "When we're talking about situations where some consumers do not know or can't find out that that same business offers the same service at a lower price, maybe at a similar location, that is when I would have a problem with it."
But Scott Gilligan, a lawyer for the National Funeral Directors Association, says comparing the two cremations is "like saying all weddings are the same."
"Just like if I want a hamburger at a gourmet place, it's the same hamburger I'm going to get at McDonald's. But it's going to cost more because of the atmosphere, because of what is being done. It's choices," Gilligan says.
According to Gilligan, when consumers choose a funeral home, they're generally not making that decision on price. They're looking at other factors, such as reputation and location.
When it comes to identical services, such as Jacksonville's cremations, which have different brand names and different prices, Gilligan says: "Well, that is simply someone offering a service, or offering a division, which is going to cater to people who are looking for the price."
One thing the storefront and the larger funeral homes have in common is an upselling strategy. Both try to sell consumers packages that bundle together multiple goods and services. This makes all of the funerals more expensive.
Bethea says it happened to her.
"Well, actually, I think they only showed us one package that they had," she says.
Ellen Bethea and her great-grandson, Lucas, look at a painting of her late husband, Archie.
That price premium is a problem the federal government has tried to fix with "the Funeral Rule," a regulation in place since 1984.
It requires itemized price lists. But funeral directors are still free to emphasize packages in the sales process, as they did with Bethea.
"You know, Archie didn't have hardly very much life insurance — maybe 5,000 — and I had, you know, a little bit of money in the bank, and it took everything."
SCI, whose officials declined to speak with NPR for this story, tells consumers in sales materials that buying a funeral package saves them money.
But company executives tell investors a different story. In a presentation to Wall Street investors last year, the company said consumers spend an extra $1,900, on average when they buy a package, versus an "a la carte" funeral.
For some context, the national median cost of a funeral with a burial, not including cemetery costs, is over $7,000.
SCI CEO Tom Ryan told investors: "Think about society today. We are in a hurry, right? Everybody is on the clock ... What we find is when we deliver these packages, people tend to spend more money because they're buying more products and services."
He added that consumers, in fact, like the packages.
What's Your Experience?
For possible future coverage, NPR wants to hear your story! Have you recently purchased goods or services from the death care industry? Fill out this form and tell us about your experience.
For possible future coverage, NPR wants to hear your story! Have you recently purchased goods or services from the death care industry? Fill out this form and tell us about your experience.
Company executives told analysts in July they're rolling out a new point-of-sale system that also increases per-funeral revenue.
Packaging goods and services under multiple brands and setting different prices for identical services are strategies the company uses in many of its markets, which span 45 states and the District of Columbia.
In Raleigh, N.C., for example, the company's full service funeral home and storefront cremation office are across the street from each other. Crossing that street can save you — or cost you — $1,895.
Riley Beggin of NPR, Brian Latimer and Emily Siner of Nashville Public Radio, Joe Wertz of StateImpact Oklahoma and Ed Williams of KUNM contributed to this story.
FEB
08
Despite Decades-Old Law, Funeral Prices Are Still Unclear
Last Updated
by
Shortly after Ed Howard's father was diagnosed with an advanced form of cancer and given six months to live, Howard and his sister Kathy Howard-Almagor sat down and talked about what to do.
One worry was their dad's funeral arrangements. They decided Kathy would call around to some funeral homes to figure out how much their father's arrangements would cost.
"I'd say, about three weeks later over the weekend I got a call from her nearly in tears," Howard recalls. "And she said that she had spent pretty much all day on the phone and on the Internet, simply trying to price funeral services, and she couldn't do it. She actually just couldn't get a straight answer about what products and services were being offered and how much they cost."
That's not supposed to happen.
A federal regulation called the Funeral Rule is supposed to protect consumers who have lost loved ones. Among other things, it requires funeral businesses to provide potential customers with clear price information.
But an NPR investigation found that the rule goes only so far in protecting consumers, and that its promise of transparency often goes unfulfilled.
After hearing his sister's story, Howard confidently told her that he would take care of the price inquiries. After all, he wasn't just any consumer. He's a lawyer specializing in consumer issues for the Center for Public Interest Law at the University of San Diego. He's also the group's head litigator and lobbyist. Getting the information, he thought, would be pretty easy.
It wasn't.
"It took me as a longtime lawyer and a professional consumer advocate literally an eight-hour day just to get a solid list of what funeral services were offered by nearby funeral establishments and how much they cost. Eight hours," he says.
Howard's problem may have been frustrating, but it isn't new. The funeral industry has been consciously nontransparent since at least the 19th century, when the National Funeral Directors Association prohibited its members from advertising in the newspaper.
As recently as the 1960s, the association barred members from advertising prices. It agreed to end the ban in 1968, only after being sued by the U.S. Department of Justice.
That culture of secrecy persists in what's now known as the death care industry. A kind of strategic ambiguity about prices is part of the business model.
"The consumer stands firmly in 1951, because that seems to be the technological level and the transparency level that the majority of American funeral homes are stuck at," says Joshua Slocum, executive director of the death care watchdog Funeral Consumers Alliance.
"In an era when you can go online and look up the price range for products as trivial as eraser caps for a pencil to a new smartphone, good luck finding anything from your local funeral home websites," he says.
In the pre-digital days, the Federal Trade Commission's Funeral Rule sought to fix that lack of price transparency, as well as rein in a variety of other abusive and anti-consumer practices occurring in the industry.
The Funeral Rule, enacted in 1984 after years of resistance by the industry, requires that funeral businesses give consumers an itemized price list when they talk to them in person, and give them clear price information when they ask for it over the phone. The itemized list, known as the general price list, is meant to help consumers pick and choose what they want and filter out what they don't.
In recent years, federal regulators shopping undercover have found about 1 in 4 funeral homes break the rule and fail to disclose price information. That's even though they risk large fines from the federal government.
Slocum and others say it's time to bring the disclosure requirements into the age of mobile platforms, searchable data and social media. Price lists, they say, should be online.
Mandating that on the federal level would require an amendment to the Funeral Rule by the FTC.
"Remember, the rule dates back to the 1980s; it's a pre-Internet rule," says Lois Greisman, a lawyer with the Federal Trade Commission's consumer protection division.
In July, Slocum's group and the Consumer Federation of America asked the FTC to revise the rule, which it called "antiquated," to require online price disclosures.
But just as it did in the days of bell-bottoms and big hair, the FTC may once again get resistance from the industry if it considers the requirement.
"I have to think that most of this is going to be market driven," says Scott Gilligan, a lawyer for the National Funeral Directors Association. The industry group represents more than 20,000 funeral directors around the country.
"If people want price information on websites, funeral homes are going to respond by putting it out there," Gilligan says. "But I'd rather do that because that's my business decision than do it because I'm afraid of getting fined $40,000 by the federal government."
At least one entrepreneur believes there is demand for online price information.
"We're hoping that we can disrupt the funeral industry," says Will Chang, who heads a Silicon Valley startup that has collected thousands of funeral home price lists and posted them on his site, Parting.com.
He put together a team of workers to pose as consumers and repeatedly call funeral homes until, he says, most of them turned over their price lists.
"Sometimes it took months, and sometimes we couldn't even get the prices at all," Chang says. "But we were able to get about 75 percent of all the funeral homes across the United States.
Chang says he was shocked that many funeral directors wouldn't even use email and preferred fax machines. In NPR's investigation, we found that, too.
The resistance Chang faced in getting the price lists means it could be challenging to keep them up to date.
So, his strategy is to persuade funeral directors to partner with his site and pay him a referral fee. Some have reacted badly, even threatening to sue him. But others have been receptive.
"A lot of these funeral homes now have, you know, younger funeral directors in their 30s or 40s, and they totally get what we're doing, and they've completely embraced us. So we feel very good about the direction of where the funeral industry is heading," Chang says.
In looking at the data he has collected, Chang found wild swings in prices for similar services. In our analysis of prices in several NPR member-station markets, so did we.
In the Nashville, Tenn., area, for example, the minimum fee for using a funeral home varied from less than $1,000 to more than $4,000.
The cost of a simple cremation in that market started below $1,000 and topped out at $2,700. Surveys by Slocum's group have also found large price swings in numerous markets.
Since the Funeral Rule was last amended 23 years ago, there's little evidence that the rule has made the industry more competitive or cost-effective for consumers, even as it has mandated price disclosures.
U.S. Department of Labor data analyzed by NPR show that since the Funeral Rule was last amended in 1994, prices have been going up faster than the rate of inflation.
As for Howard, the consumer advocate who suddenly became a consumer, he went to the California Legislature in 2011, a year after his father died at age 76. He lobbied to get the state to require funeral businesses to post general price lists online.
At first, the California Funeral Directors Association opposed the move. But a compromise bill passed and took effect in 2013. California funeral homes now must either post their price lists online or at least post a list of their products and tell consumers that a price list is available on request.
Slocum's group has found that most California funeral homes chose to post their actual price lists. Both he and the industry's Gilligan say it's too early to gauge the law's effect on pricing and competition.
Howard wants the federal government to act as well.
"The FTC really, really, really needs to get off its south pole and bring itself into the 20th and 21st centuries, and make this modest requirement a national requirement," he says.
Riley Beggin of NPR, Brian Latimer and Emily Siner of Nashville Public Radio, Joe Wertz of StateImpact Oklahoma and Ed Williams of KUNM contributed to this story.
Copyright 2017 NPR. To see more, visit http://www.npr.org/.
Funeral Homes Cited By The FTC For Not Disclosing Price Lists
This database only shows funeral businesses that have entered into the Federal Trade Commission’s Funeral Rule Offenders Program, or were sued by the agency for their business practices. It is a not a comprehensive listing of funeral businesses in every state. The Funeral Rule Offenders Program is for businesses that the FTC alleges failed to disclose price information to consumers. Those businesses instead make voluntary payments and receive training rather than face an FTC lawsuit.
All States
- Alabama (2)
- Alaska (0)
- Arizona (0)
- Arkansas (5)
- California (9)
- Colorado (1)
- Connecticut (2)
- Delaware (7)
- District of Columbia (1)
- Florida (0)
- Georgia (0)
- Hawaii (0)
- Idaho (0)
- Illinois (1)
- Indiana (0)
- Iowa (0)
- Kansas (0)
- Kentucky (3)
- Louisiana (8)
- Maine (0)
- Maryland (3)
- Massachusetts (0)
- Michigan (0)
- Minnesota (0)
- Mississippi (0)
- Missouri (1)
- Montana (0)
- Nebraska (0)
- Nevada (0)
- New Hampshire (0)
- New Jersey (5)
- New Mexico (0)
- New York (5)
- North Carolina (7)
- North Dakota (0)
- Ohio (11)
- Oklahoma (0)
- Oregon (2)
- Pennsylvania (0)
- Rhode Island (0)
- South Carolina (2)
- South Dakota (0)
- Tennessee (0)
- Texas (32)
- Utah (0)
- Vermont (0)
- Virginia (9)
- Washington (9)
- West Virginia (0)
- Wisconsin (4)
- Wyoming (0)
Source: NPR analysis of Federal Trade Commission data by Robert Benincasa
Credit: Robert Benincasa, Stephan Bisaha, David Eads and Alyson Hurt/NPR
AND:
http://www.cbsnews.com/news/a-buried-problem-at-the-countrys-top-funeral-home-chain-service-corporation-international/
Credit: Robert Benincasa, Stephan Bisaha, David Eads and Alyson Hurt/NPR
AND:
http://www.cbsnews.com/news/a-buried-problem-at-the-countrys-top-funeral-home-chain-service-corporation-international/
A buried problem at country’s top funeral home chain?
Families
dealing with the death of a loved one are often struggling with a range
of bereavement issues. The pain of getting overcharged by a funeral
home may only add to their grief.
Rates and price disclosures from Service Corporation International, the country’s largest funeral home chain, is coming under fire from a new report from the Funeral Consumers Alliance and Consumer Federation of America. Their survey found that median prices for basic funeral services are as much as 72 percent higher at SCI funeral homes, which often use the Dignity Memorial brand name, than at independent rivals.
The pricing disparities may not be obvious to consumers, however. The report says SCI’s funeral homes fail to post product prices on their websites, which may make it more difficult for consumers to comparison shop for the best prices on cremations, burials and funerals. By law, funeral homes must disclose prices either over the telephone or in writing when customers visit their businesses, but they aren’t required to post prices online, which the consumer advocacy groups say creates problems for consumers.
“One of the most critical ways families can control their costs is by shopping around, just as they would for any other product, but it’s difficult to do that for funerals,” said Josh Slocum, executive director of the Funeral Consumers Alliance. The federal rule “really needs to be updated to [make it] be possible for consumers using the internet” to shop and compare prices.
The survey found SCI funeral homes charge a median of $2,700 for a simple cremation, compared with $1,562 for independent funeral homes. Burial services at SCI properties carry a median price of $2,845, compared with $1,893 for independent competitors. Full service funerals cost a median of $7,705 at SCI funeral homes, compared with $5,241 at independent rivals.
“We continuously look for ways to improve the customer experience and online resources are one way to do that,” the company said in a statement. “However, we strongly believe having a personal conversation to understand how families envision honoring their loved ones goes far beyond simply using an online resource and is the best way to help families during a very difficult time.”
It added, “We take the rights of client families, the Funeral Rule, and other industry regulations and requirements seriously.”
The findings are based on a survey of 35 SCI funeral homes and 103 independent funeral homes.
The company’s share priced dipped slightly Monday afternoon to about $31 upon release of the consumer pricing study but shares still are trading near their 52-week high of $32.21.
Funeral pricing often isn’t clear despite federal regulations on providing costs either over the telephone or in writing in person, according to a recent report from NPR. In one case, a widow said she relied on friends’ recommendations to use an SCI-owned funeral home called Hardage-Giddens Funeral Home. She paid almost $3,300 for a cremation, or almost twice as much as the rates charged by competing funeral homes, NPR said.
A 2015 investigation by the Federal Trade Commission, which oversees the rule about price disclosures, found about one-quarter of funeral homes in six states failed to disclose pricing information to consumers.
The problems are heightened by the grief and distress that many families are suffering while also handling funeral services for their loved one who has died. Because of the stress, only about one in five consumers shop around for funeral services, even though the cost of a funeral or cremation can prove a significant expense for families.
Despite the disclosure rule, funeral prices haven’t seen much pressure to remain low. Funeral expenses have outpaced inflation since the mid-1980s, according to NPR, which cited Labor Department data.
SCI shares have increased about 25 percent during the past year, compared with 19 percent for the S&P 500. In a March investor presentation, the company said it expects average annual growth in adjusted per-share earnings of as much as 12 percent. The company controls about 16 percent of the funeral home market in North America, while about 79 percent is represented by independent homes. The remaining 5 percent is controlled by other funeral home conglomerates.
Critics say SCI’s share of the funeral home market place hasn’t delivered benefits to consumers, at least on pricing.
“Its market share has grown significantly in the last decade” through acquisitions, said Stephen Brobeck, executive director of the Consumer Federation of America, on the conference call. “That would not be troubling if it utilized any economies of scale.”
Rates and price disclosures from Service Corporation International, the country’s largest funeral home chain, is coming under fire from a new report from the Funeral Consumers Alliance and Consumer Federation of America. Their survey found that median prices for basic funeral services are as much as 72 percent higher at SCI funeral homes, which often use the Dignity Memorial brand name, than at independent rivals.
The pricing disparities may not be obvious to consumers, however. The report says SCI’s funeral homes fail to post product prices on their websites, which may make it more difficult for consumers to comparison shop for the best prices on cremations, burials and funerals. By law, funeral homes must disclose prices either over the telephone or in writing when customers visit their businesses, but they aren’t required to post prices online, which the consumer advocacy groups say creates problems for consumers.
“One of the most critical ways families can control their costs is by shopping around, just as they would for any other product, but it’s difficult to do that for funerals,” said Josh Slocum, executive director of the Funeral Consumers Alliance. The federal rule “really needs to be updated to [make it] be possible for consumers using the internet” to shop and compare prices.
The survey found SCI funeral homes charge a median of $2,700 for a simple cremation, compared with $1,562 for independent funeral homes. Burial services at SCI properties carry a median price of $2,845, compared with $1,893 for independent competitors. Full service funerals cost a median of $7,705 at SCI funeral homes, compared with $5,241 at independent rivals.
“We continuously look for ways to improve the customer experience and online resources are one way to do that,” the company said in a statement. “However, we strongly believe having a personal conversation to understand how families envision honoring their loved ones goes far beyond simply using an online resource and is the best way to help families during a very difficult time.”
It added, “We take the rights of client families, the Funeral Rule, and other industry regulations and requirements seriously.”
The findings are based on a survey of 35 SCI funeral homes and 103 independent funeral homes.
The company’s share priced dipped slightly Monday afternoon to about $31 upon release of the consumer pricing study but shares still are trading near their 52-week high of $32.21.
Funeral pricing often isn’t clear despite federal regulations on providing costs either over the telephone or in writing in person, according to a recent report from NPR. In one case, a widow said she relied on friends’ recommendations to use an SCI-owned funeral home called Hardage-Giddens Funeral Home. She paid almost $3,300 for a cremation, or almost twice as much as the rates charged by competing funeral homes, NPR said.
A 2015 investigation by the Federal Trade Commission, which oversees the rule about price disclosures, found about one-quarter of funeral homes in six states failed to disclose pricing information to consumers.
The problems are heightened by the grief and distress that many families are suffering while also handling funeral services for their loved one who has died. Because of the stress, only about one in five consumers shop around for funeral services, even though the cost of a funeral or cremation can prove a significant expense for families.
Despite the disclosure rule, funeral prices haven’t seen much pressure to remain low. Funeral expenses have outpaced inflation since the mid-1980s, according to NPR, which cited Labor Department data.
SCI shares have increased about 25 percent during the past year, compared with 19 percent for the S&P 500. In a March investor presentation, the company said it expects average annual growth in adjusted per-share earnings of as much as 12 percent. The company controls about 16 percent of the funeral home market in North America, while about 79 percent is represented by independent homes. The remaining 5 percent is controlled by other funeral home conglomerates.
Critics say SCI’s share of the funeral home market place hasn’t delivered benefits to consumers, at least on pricing.
“Its market share has grown significantly in the last decade” through acquisitions, said Stephen Brobeck, executive director of the Consumer Federation of America, on the conference call. “That would not be troubling if it utilized any economies of scale.”
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