Funeral Consumers Alliance

 
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ICFA Blasts CBS

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FCA responds to the International Cemetery and Funeral Association

Following a two-part broadcast on CBS February 11 and 10 on funeral fraud ,the National Funeral Directors Association and the International Cemetery and Funeral Association sent CBS letters of protest. Both accused the network of airing sensationalist stories of funeral fraud, stories taken out of context.

The February 10 CBS Evening News broadcast did feature a guest who dispensed the absurd "consumer advice" that customers should check a funeral home's toilet paper to assess the overall service quality. In addition, the piece could have been done less heavy-handedly.
FCA executive director Joshua Slocum appeared live on CBS' Early Show February 11 to talk briefly with Harry Smith on how consumers can protect themselves while shopping for a funeral.
ICFA responded immediately to these segments in their typical fashion. You might call their approach "accentuate the positive, eliminate the negative."
FCA sent a letter below  response, then  ICFA sent us a letter of rebuttal on February 25. All three letters are below, in chronological order.

 

February 11, 2004 

Mr. Leslie Moonves
Chairman, President and CEO
The CBS Television Network
51 W. 52nd Street
New York, NY 10019

Re: 2/10 CBS Evening News Broadcast,
"When Death Knocks, Bereaved Beware"

Dear Mr. Moonves:

The Tuesday, February 10th broadcast of CBS Evening News with Dan Rather contained a segment warning your viewers about funeral scams, especially the preservative claims of so-called "sealer caskets." We agree that if there is one thing all consumers should remember in making funeral arrangements, it would be that human remains cannot be preserved for any extended length of time. A "red flag" should immediately be raised when any seller claims to have a product or service that will preserve human remains over the long term. However, CBS represented as "news" the experience of a consumer, Barbara Osborne, who had already persuasively testified to her experience almost two years ago before a U.S. Senate subcommittee in April 2002. While the passage of time does not make her experience any less heartbreaking, it does remain a singular event that CBS News failed to place into any context such as the fact that there are over 5,000 funerals and burials in the United States each day.

Indeed, the segment's opening claim that "there are many horror stories" in the funeral industry suggests that fairness was not a priority in the report, so let's look at the record. Consumers have filed almost 550 complaints with the Federal Trade Commission (FTC) against funeral-related businesses during a 29 month period between 2001 and 2003 for an average of about 19 complaints per month compared to about 167,000 funerals per month. This results in the statistically negligible complaint rate of one-hundredth of one percent. Regardless, funeral-related complaints are emotional in nature and we do not trivialize them. It is significant to note that none of the FTC complaints involved "sealer caskets."1 Many complaints dealt with the failure of funeral homes to provide written price lists, an issue that the CBS News segment dramatically illustrated by use of an undercover camera at three Washington, D.C. area funeral homes. Ironically, the national headquarters of the FTC that enforces the price disclosure requirements of the Funeral Rule is located on Constitution Avenue, probably not more than a mile or two from these funeral homes. CBS is no doubt aware of this proximity, which leads to an interesting question: Is CBS News concerned with helping consumers or just frightening them?

A related report on this morning's The Early Show featured a consumer advocate urging consumers to shop in advance of need, to obtain a copy of the price list upon entering a funeral home, to leave if they don't get one, and to bring along a friend who may be less emotionally involved in the transaction. We concur with this advice but were disappointed when the advocate repeated the flawed "wisdom" about preplanning "but not prepaying." Similar to all consumer purchases, prepaying for a funeral well before it is needed has advantages and risks that can be evaluated prior to payment. We believe it is more helpful to warn that prefunding is not for everyone, but telling consumers never to prepay and to instead save for their funeral expenses on their own can be the most hazardous plan of all.

The overwhelming majority of prepaid funerals are performed as intended, and many have price guarantees that are written into the contract. These funds are also protected from creditors of both the consumer and of the funeral home. Prepayment is recommended when consumers must "spend down" their assets to qualify for government assistance. However, funds privately saved by consumers in bank accounts or certificates of deposits are not generally shielded from creditors' claims. The loss of these funds prior to the funeral most commonly occurs due to the expenses of the final illness including services not covered by insurance or by insurance co-pay obligations. To the best of our knowledge, nobody can advise consumers on how to pay for a funeral after their savings have been depleted. Prepayment can and does work.

Finally, there are an increasing number of funeral and burial information resources for consumers to consult that are easily accessible through the Internet. We urge consumers to check several different web sites to neutralize the "private agendas" common to many sites both from the industry and its critics. Among the sites, we urge consumers to visit our association's Consumer Resources section at www.icfa.org that we believe offers the most comprehensive information of all in a user-friendly Question-and-Answer format. Best of all, no salesman will call.

Very truly yours,

Robert M. Fells
External Chief Operating Officer
and General Counsel


1 Two casket retailers questioned whether the term "sealer casket" is prohibited by law, but there were no consumer complaints involving the product. *********************************************************************************************
 

February 19, 2004

 

Robert M. Fells Chief External Operating Officer and General Counsel
International Cemetery and Funeral Association
1895 Preston White Drive, Suite 220
Reston, VA 20191

Dear Mr. Fells,

As you know, the February 10 and 11 CBS News segments relating to consumer problems in the funeral industry provoked consternation among funeral service's two largest trade associations.

I concur with some of the criticisms leveled at the network. Yet I'm troubled by some statements contained in your February 11 response to CBS. These statements continue ICFA's pattern of downplaying very real problems in the funeral and death services industries.

Clearly, Ed Markin's advice to consumers to check the thickness of a funeral home's toilet paper in order to assess the business's quality of service was ludicrous. CBS News did its viewers no service, nor did it burnish its image as a network of serious journalists, in airing this laughable piece of "advice."

The segment did, however, touch upon serious and substantive consumer issues. The problem was not so much what CBS chose to air, but what it did not. As you have no doubt experienced, television news is produced at a frenetic pace that often precludes in-depth discussion.

As the unnamed consumer advocate to whom you referred in your letter, I was disappointed that I was unable to elaborate on the benefits and dangers of prepaying for funerals during my February 11 appearance on the CBS Early Show. But warning consumers of the risks of funeral prepayment, as I did, was hardly "flawed 'wisdom.'" With so many players in the funeral field wooing consumers into unfair, usurious, and expensive prepaid contracts, it was vital that I offer a counterpoint.

While you rightly asserted in your letter to CBS that consumers facing Medicaid "spend-downs" may shelter funeral funds through prepaid contracts, you glossed over the egregious problems endemic to "preneed" nationally. I found it disingenuous — to put it kindly — for you to sum up your argument with the statement, "Prepayment can and does work."

Surely you are aware of the tangle of confusing and unfair preneed statutes and regulations existing among the 50 states. Does prepayment "work" for all Indiana consumers when it automatically becomes irrevocable 30 days after purchase? Does prepayment "work" for Florida consumers who can lose two-thirds of their investment when they decide to back out of a contract for fear their graves have been resold? Does prepayment "work" for families in Pennsylvania, where the Commonwealth Court recently ruled that preneed sellers do not have to transfer the customer's funds if the family moves?

Expanding on the theme of ICFA's January 6, 2004, report on funeral-related complaints at the Federal Trade Commission, you wrote to CBS that the number of complaints against funeral-related businesses lodged with the FTC in a 29-month period amounted to a mere 1/100th of one - percent of all complaints received. While this number may indeed be "statistically negligible," your argument takes no account of the widespread consumer ignorance of the Funeral Rule and state regulatory protections of which consumers may take advantage. How else can we explain the dearth of complaints to the FTC in light of the Funeral Rule violations FCA groups document nationwide?

ICFA's January 6, 2004 report — part of a transparent attempt to derail plans to expand and codify the Funeral Rule — stated:

". . . the complaint tabulation establishes that consumers will file complaints when they believe they have been treated unfairly by industry members, contrary to assertions by industry critics that 'consumers don't complain.'"

I assume Funeral Consumers Alliance is among those unnamed "industry critics." As FCA's executive director, I assure you that far fewer consumers actually complain to the FTC than the number who have a right to do so. Daily correspondence and telephone calls arrive at my office from citizens who relate deceptive practices in the funeral transaction, only to say they had no idea the Funeral Rule existed, or that any regulatory board existed in their state.

The January 6 ICFA report also states:

"The new tabulation confirms, however, ICFA's long-held position that consumers experience only isolated incidents of potential funeral rule violations by sellers such as cemeteries that are not covered by the rule."

Taking these two statements together, ICFA seems to be making an argument that goes like this: If a tree falls in the forest and no one reports it, then the tree never fell.

A recent survey by the Funeral Consumers Alliance of Central Ohio found that among 19 Columbus funeral homes, none of their General Price Lists complied with the Funeral Rule. Eight funeral homes, for example, failed to offer FTC-mandated service options or the prices for these.

Assume that each of these 19 funeral homes performed a conservative 50 services in 2003, and that each customer was given the same General Price List we collected for our survey. By my calculations, this results in 950 potential consumer complaints — almost double the number ICFA found in the Federal Trade Commission's nationwide files.

Does this mean that simply because these consumers didn't "believe" (or didn't know) they were mistreated, that the mistreatment didn't occur? This example comes from but one mid-sized American city — could anyone credibly claim that problems in the funeral industry come from "a few bad apples?"

Of course, consumer groups and industry associations will not see eye-to-eye on every matter. I would hope, though, that we all have the consumer's best interests in mind. While FCA does not agree with all the policy decisions made by NFDA, the organization did have the courage to plainly acknowledge the widespread problems with preneed in no fewer than three editorials last year in its magazine, The Director.

ICFA, by contrast, continues to ignore, obfuscate, and rationalize away the troubles plaguing the funeral transaction. This reflects very poorly indeed on its members and constituency. I urge ICFA to abandon its efforts to stall increased consumer protection, and to instead join with like-minded organizations to promote fair and honest business practices that benefit the consumer and the industry alike.

Sincerely,

Joshua Slocum
Executive Director
Funeral Consumers Alliance
33 Patchen Road
South Burlington, VT 05403

cc:
Leslie Moonves, Chairman, President and CEO, CBS
The Honorable Christopher J. Dodd, U.S. Senator
The Honorable Mark Foley, U.S. Representative
Carole Danielson, Funeral Rule Coordinator, Federal Trade Commission
Allen Hile, Division of Marketing Practices, Federal Trade Commission
Christine Pepper, CEO, National Funeral Directors Association
Susan Simon, Editor, Funeral Monitor
Ron Hast, Editor and Publisher, Mortuary Management
Doug Hernan, Editor and Publisher, Funeral Service Insider
Edward J. Defort, Editor, American Funeral Director
Jim Miller, Editor and Publisher, Savvy Senior

 


February 25, 2004

 

Mr. Joshua Slocum
Executive Director
Funeral Consumer Alliance
33 Patchen Road
South Burlington, VT 05403

Dear Mr. Slocum:

We have received your letter, dated February 19, 2004, which was written in response to ours, dated February 11, 2004, to Mr. Moonves, CBS Television Network. We agree that television news reporting lacks nuance but your letter provides a good example of the ICFA's ongoing concerns over how consumer protection issues are mischaracterized.

The main thrust of your letter takes issue with our reporting on the relatively low number of funeral-related consumer complaints received by the Federal Trade Commission during the 29-month period between 2001 and 2003. We do not claim or imply that the number constitutes the entire universe of consumer complaints in the United States. However, instead of providing additional statistical data, you indulge in sheer speculation, to quote: "Assume each of these 19 funeral homes performed a conservative 50 services in 2003, and that each customer was given the same General Price List we collected for our survey. By my calculations, this results in 950 potential consumer complaints - almost double the number ICFA found in the Federal Trade Commission's nationwide files." Well, Mr. Slocum, as long as you're just speculating, why stop at 950? Why not make it 9,950? You see my point: the ICFA is attempting to quantify documented complaints from a federal agency while you rely on your imagination for the data.

Like yourself, we receive daily phone calls and correspondence from consumers with inquiries and complaints through our volunteer complaint-resolution arm, the Cemetery Consumer Service Council. However, at the end of each year we tally up our data and circulate it to federal agencies, state consumer protection offices, the Better Business Bureaus, and the media. Through industry volunteers, not only from the ICFA but from other trade associations as well, we are able to resolve many of these problems. In fact, the only complaints where we cannot assist are the ones we don't hear about. As a result, we would welcome a cooperative effort with FCA to assist with consumer complaints that you are receiving.

The wisdom of prefunding is very much a sore point with your organization and we definitely would want to pursue this issue if you are so inclined. The ICFA has consistently cautioned that prepayment is not for everybody, but in this country where many people don't even save for their retirement years, is it wise to assume that people will save for their funerals? Even the FTC encourages consumers to purchase the cemetery property of their choice well in advance of need. However, the blanket condemnation of prefunding is a disservice to consumers who wish to prudently plan for their final expenses.

Another aspect of your letter concerns "the tangle of confusing and unfair preneed statutes existing among the 50 states" and that many consumers seem unaware of the FTC Funeral Rule and state regulatory protections. You ask, "How else can we explain the dearth of complaints to the FTC...?" One plausible explanation was provided recently by the U.S. General Accounting Office (GAO), the investigative arm of Congress. In September 2003, the GAO published a report on state funeral and burial laws observing, "It must be noted that a low number of enforcement actions taken by a state may not be indicative of lax enforcement efforts, but rather could be reflective of a general lack of problems involving the death care industry in that state." The point is that we need more documentation, not "the sky is falling" speculation.

It is regrettable that you chose to end your letter by making inflammatory accusations that ICFA "continues to ignore, obfuscate, and rationalize away the troubles plaguing the funeral transaction. This reflects very poorly indeed on its members and constituency." You are evidently unaware that since 1998 the ICFA has published a series of Model Guidelines for State Laws and Regulations, which currently number twenty-eight. These guidelines cover such topics as prepaid contract trust funds, insurance-funded prearrangements, authorization to control final disposition, handling of remains in conjunction with the cremation process, solicitation, consumer guarantee funds, and written price disclosures prior to purchasing, among many others. We provided a copy of the guidelines to your predecessor, Mrs. Carlson, and we assume it remains the property of FCA. We were also contacted by one of your board members who wished to purchase a copy of the Model Guidelines but we provided this material without charge as a professional courtesy. It is interesting to note that Senator Chris Dodd and Representative Mark Foley incorporated much of the language of our model guideline on prepaid contract disclosures in the legislation they introduced into Congress in November 2002. Contrary to your assertions, we believe the Model Guidelines for State Laws and Regulations reflect very responsibly on ICFA's members and constituency.

The ICFA does not fear new laws, but we are very concerned with bad laws, especially "laws by anecdote." These are proposals made in response to isolated events that serve neither consumers nor the industry. We seem to share a mutual concern that some states require stronger laws and better enforcement, two goals that led to the creation of the ICFA model guidelines project in the first place. We also want to see more uniformity among state laws, but the mere fact that laws differ from state to state is not in itself necessarily a "red flag," a point made in the GAO report.

In closing, if your letter was meant to initiate a dialogue between our two organizations, then we welcome the opportunity to meet with you and discuss issues of mutual concern, paramount among which is consumer education.

Very truly yours,

Robert M. Fells
External Chief Operating Officer
and General Counsel


cc:
Leslie Moonves, Chairman, President and CEO, CBS
The Honorable Christopher J. Dodd, U.S. Senator
The Honorable Mark Foley, U.S. Representative
Carole Danielson, Funeral Rule Coordinator, Federal Trade Commission
Allen Hile, Division of Marketing Practices, Federal Trade Commission
Christine Pepper, CEO, National Funeral Directors Association
Sue Simon, Editor, Funeral Monitor
Ron Hast, Editor and Publisher, Mortuary Management
Doug Hernan, Editor and Publisher, Funeral Service Insider
Edward J. Defort, Editor, American Funeral Director
Jim Miller, Editor and Publisher, Savvy Senior
*********************************************************************************************

 

 

 

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