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Who Must Comply with the FTC Funeral Rule?

All funeral providers must comply with the Rule. A funeral provider is defined as one that sells or offers to sell both funeral goods and funeral services to the public.

Funeral goods are all products sold directly to the public in connection with funeral services.

Funeral services are:

• services used to care for and prepare bodies for burial, cremation, or other final disposition;

• services used to arrange, supervise, or conduct the funeral ceremony or final disposition of human remains.

Funeral service providers do not have to be licensed funeral directors and their businesses do not have to be licensed funeral homes to be covered by the Funeral Rule. Cemeteries, crematories, and other businesses can also be "funeral providers" if they market both funeral goods and services.

They must comply with the Rule even if a particular consumer buys only goods or only funeral services, but not both. If they offer to sell both goods and services, they must comply with the Rule for every customer. However, they are not covered by the Rule if they sell only funeral goods, such as caskets, but not services relating to the disposition of remains.

They are covered by the Rule even if they organize their business to sell goods through one company and services through another. If they are funeral providers, they cannot avoid being covered by the Rule by restructuring their business.

FTC Funeral Rule and Preneed Funeral Planning

The Rule's requirements, as described here, apply to both preneed and at-need funeral arrangements.

In preneed situations, funeral service providers must comply with all Rule requirements at the time funeral arrangements are pre-planned. They also need to comply with the Rule after the death of the individual who made preneed arrangements. If the survivors inquire about goods or services, alter the pre-planned arrangements, or are required to pay additional sums of money, the funeral service provider must give them all relevant disclosures and price lists.

For example, survivors may be asked to pay additional amounts if the pre-paid plan does not guarantee prices at the time of death. In other cases, survivors may change arrangements specified in the preneed plan, adding or subtracting certain goods or services. In both situations, the requirements of the Rule apply. The funeral service provider must give the survivors relevant price lists, as well as an itemized Statement of Funeral Goods and Services Selected.

They also must comply with the Rule if they sell preneed contracts on behalf of one or more funeral homes, but do not themselves provide funeral goods and services. In such a case, even though they don't provide the funeral items, they are an agent of a funeral provider and therefore are covered by the Rule.

The Rule does not apply to preneed contracts entered into before the Rule went into effect in 1984. However, if a preneed contract signed before 1984 is modified after 1984, the modification triggers all of the Rule's requirements.

Example: Mr. Green made preneed arrangements in 1980; he dies in 1994. At the time of his death, his wife wants to change the casket specified in the preneed contract and to add visitation hours. Because Mrs. Green is changing the contract after 1984, the funeral provider must comply with all of the Rule's requirements, including giving Mrs. Green a General Price List, showing her a Casket Price List, and providing her with an itemized Statement of Goods and Services Selected.

Note: In a situation like the above example, providers should check their state law to determine whether it allows them to alter the terms of such a contract.