Avoiding the FTC Sting Operations (Part 2)

    The author discussed in Part 1 of this column that the FTC Funeral Rule has been in effect since 1984 and that all funeral providers should be aware of its requirements. It was also mentioned that the FTC from time to time conducts sting operations to check on funeral providers in various areas of the country and the manner these undercover operations are conducted was reviewed. Some of the areas for violations were also reviewed, including the primary one of failing to provide a consumer with a copy of the General Price List immediately when they visit your facility.
    A second primary area for a violation is if the GPL and other forms required by the Funeral Rule are not in compliance with the requirements. Another area for violations that was mentioned was the failure to provide casket price information in the proper format and at the appropriate time.
    Since there is a tremendous amount of information available from the FTC, industry associations and private sources about the requirements for these forms, there really is no excuse for the failure to comply.
    The author also reviewed the FTC’s procedures for notifying of a violation and the options that were provided to avoid having the FTC file a lawsuit against an alleged violator and attempting to impose a penalty of $16,000 for each violation, The major option is to participate in the FROP Program sponsored by the NFDA, enter into a Consent Decree with the FTC and pay a fine based on .8% of the funeral provider’s average gross sales for 3 years. Since none of these alternatives are particularly attractive, the best course of action for any funeral provider to establish and maintain an FTC Rule Training and Compliance program designed to avoid potential violations.
    The author recommends that the following be implemented:

1. Make sure that you have obtained the latest up to date information about the requirements of the FTC Funeral Rule. The FTC.gov website has extensive information available about the Funeral Rule, including a copy of the Funeral Rule and Guidelines to follow. Most local, state and national industry trade associations also have extensive material available.
2. Check the requirements for the Forms and Disclosure and review your own forms to make sure they are in compliance. Some of the industry trade associations provide a review service to confirm that forms are in compliance or you can consult professionals familiar with the industry to provide assistance on preparation of the forms and determining their compliance with current requirements. Be careful not to borrow other funeral provider’s forms as they may not be in compliance. Also, forms should be reviewed on a regular basis at least annually.
3. Train and retrain your employees about the requirements of the Funeral Rule. Again there are outside consultants that can provide training programs and some of the local, state and national industry associations can provide information and assistance.
4. Monitor your employees to be sure they are carefully complying with the requirements. Some of the author’s clients have conducted their own sting operations and discovered to their dismay that some employees became lax in following the requirement.
5. Remind your employees about the requirements on a regular basis. Some funeral providers provide every employee with a checklist that has to be filled out for every customer and any inquiries. Also, advise them to be wary of a shopper, because it is likely the shopper will be checking on compliance for the FTC or a state agency that may also have jurisdiction.

    There are consulting companies in the industry and local, state and national associations that can provide assistance, but in the final analysis it is up to each funeral provider to make sure their own business is in compliance.