[Federal Register Volume 85, Number 31 (Friday, February 14, 2020)]
[Proposed Rules]
[Pages 8490-8493]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02803]


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FEDERAL TRADE COMMISSION

16 CFR Part 453


Funeral Industry Practices Rule

AGENCY: Federal Trade Commission.

ACTION: Regulatory review; request for comment.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is 
requesting public comment on its Trade Regulation Rule entitled 
``Funeral Industry Practices Rule'' (``Funeral Rule'' or ``Rule''). The 
Rule defines unfair and deceptive practices in the sale of funeral 
goods and services and prescribes preventive requirements to protect 
against these practices. The Commission is soliciting comments about 
the efficiency, costs, benefits, and regulatory impact of the Rule as 
part of its systematic review of all current Commission regulations and 
guides. All interested persons are hereby given notice of the 
opportunity to submit written data, views, and arguments concerning the 
Rule.

DATES: Written comments must be received on or before April 14, 2020.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Instructions for Submitting Comments 
part of the SUPPLEMENTARY INFORMATION section below. Write ``Funeral 
Rule Regulatory Review, 16 CFR part 453, Project No. P034410,'' on your 
comment, and file your comment online through https://www.regulations.gov. If you prefer to file your comment on paper, mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW, 5th Floor, Suite 5610 (Annex B), Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: Patti Poss (202-326-2413), Division of 
Marketing Practices, Bureau of Consumer Protection, Federal Trade 
Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580, 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    The Commission issued the Funeral Rule pursuant to its authority 
under Sections 5 and 18 of the Federal Trade Commission Act to 
proscribe unfair or deceptive acts or practices.\1\ The Funeral Rule's 
goal is to lower barriers to price competition in the funeral goods and 
services market and to facilitate informed consumer choice.\2\ The Rule 
helps to achieve these goals by ensuring that: (1) Consumers have 
access to sufficient information to permit them to make informed 
decisions; (2) consumers are not required to purchase goods and 
services that they do not want and are not required by law to purchase; 
and (3) misrepresentations are not used to influence consumers' 
decisions.\3\
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    \1\ Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. 
45(a), prohibits ``unfair or deceptive acts or practices in or 
affecting commerce.'' Section 18 of the FTC Act, 15 U.S.C. 57a, 
permits the Commission to promulgate, modify, and repeal trade 
regulation rules that define with specificity acts or practices that 
are unfair or deceptive in or affecting commerce within the meaning 
of Section 5.
    \2\ Original Funeral Rule Statement of Basis and Purpose, 47 FR 
42260 (Sept. 24, 1982).
    \3\ Id.
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    When it promulgated the Funeral Rule, the Commission recognized 
that the arrangement of a funeral is an important financial transaction 
for consumers, with unique characteristics that reduce the ability of 
consumers to make careful, informed purchase decisions. The Commission 
noted that funeral arrangement decisions must often be made while under 
the emotional strain of bereavement, and that consumers often lack 
familiarity with the funeral transaction. Further, ``consumers are 
called upon to make several important and potentially costly decisions 
under tight time constraints.'' \4\
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    \4\ Id.
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    The Commission issued the Funeral Rule on September 24, 1982, and 
it became fully effective on April 30, 1984.\5\ The original Rule 
included a provision requiring a regulatory review of the Rule no later 
than four years after its effective date to determine whether it should 
be amended or terminated.\6\ The Rule was amended effective July 19, 
1994,\7\ and the United States Court of Appeals for the Third Circuit 
upheld the amended Rule following a challenge by funeral industry 
groups.\8\
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    \5\ Certain portions of the Rule became effective on January 1, 
1984 and others on April 30, 1984. 48 FR 45537, 45538 (Oct. 6, 
1983); 49 FR 564 (Jan. 5, 1984). Several funeral providers 
challenged the Rule, but it was upheld by the Fourth Circuit. Harry 
and Bryant Co. v. FTC, 726 F.2d 993 (4th Cir.), cert. denied, 469 
U.S. 820 (1984).
    \6\ 16 CFR 453.10 (1982).
    \7\ Amended Funeral Rule Statement of Basis and Purpose, 59 FR 
1592 (Jan. 11, 1994).
    \8\ Pennsylvania Funeral Directors Ass'n, Inc. v. FTC, 41 F.3d 
81, 83 (3d Cir. 1994).
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    The Rule specifies that it is an unfair or deceptive act or 
practice for a funeral provider to: (1) Fail to furnish accurate price 
information disclosing the cost to the purchaser for each of the 
specific funeral goods or services used in connection with the 
disposition of deceased human remains; (2) require

[[Page 8491]]

consumers to purchase a casket for direct cremation; (3) condition the 
furnishing of any funeral good or funeral service upon the purchase of 
any other funeral good or funeral service or charge a fee as a 
condition to furnishing any goods or services, such as a ``casket 
handling'' fee to consumers who provide their own casket; or (4) embalm 
the deceased for a fee without authorization when embalming is not 
required by law.
    The Rule also specifies that it is a deceptive act or practice for 
a funeral provider to misrepresent the legal or local cemetery 
requirements for: (1) Embalming; (2) caskets in direct cremations; (3) 
outer burial containers; or (4) the purchase of any other funeral good 
or service. Further, the Rule prohibits misrepresentations that so-
called ``cash advance'' items are provided to the consumer at the same 
price as that paid by the funeral provider, when that is not the case, 
or that any funeral goods or services will delay the natural 
decomposition of human remains for a long-term or indefinite time.
    The Rule sets forth preventive requirements in the form of itemized 
price and information disclosures to ensure funeral providers do not 
engage in the unfair or deceptive acts or practices described above. 
First, the Rule requires funeral providers give persons inquiring about 
funeral goods or services a General Price List (``GPL'') to keep, which 
lists the goods and services they offer and their itemized prices, 
along with specific disclosures. Second, the Rule requires funeral 
providers show consumers a Casket Price List (``CPL'') identifying the 
caskets and alternative containers they carry, and an ``Outer Burial 
Container Price List'' (``OBCPL'') listing the vaults and grave liners 
they offer, along with specific disclosures.
    On March 14, 2008, the Commission completed a second regulatory 
review (``2008 Review''), and concluded that the Rule was still needed 
and should be retained.\9\ The Commission also considered whether the 
Rule should be expanded to cover cemeteries, crematories and third-
party sellers of caskets, monuments, and other funeral goods. However, 
the evidence amassed in the regulatory review record was not indicative 
of a sufficiently widespread pattern of unfair or deceptive acts or 
practices to suggest that, even if the record were to be developed 
further, it would justify an amendment proceeding to expand the Rule to 
cover those additional death care businesses.\10\ The Commission 
likewise determined that an amendment proceeding was not warranted for 
other changes advocated by some of the public comments.\11\
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    \9\ 73 FR 13740 (Mar. 14, 2008).
    \10\ 73 FR at 13742.
    \11\ Id. In particular, the Commission found insufficient 
evidence that: (1) Widespread unfair or deceptive practices occur in 
the sale of pre-need funeral arrangements; (2) discount funeral 
packages offered in addition to itemized services cause consumer 
injury; and (3) adding additional disclosure requirements is 
necessary to remedy any widespread pattern of unfair practices. The 
Commission also determined that casket-handling fees should continue 
to be disallowed and that the provision allowing funeral providers 
to charge a single non-declinable fee for their basic services and 
overhead should be retained.
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II. Regulatory Review of the Funeral Rule

    The Commission reviews its rules and guides periodically to seek 
information about their costs and benefits, regulatory and economic 
impact, and general effectiveness in protecting consumers and helping 
industry to avoid deceptive or unfair practices. These reviews assist 
the Commission in identifying rules and guides that warrant 
modification or rescission.
    With this document, the Commission initiates a new review. The 
Commission solicits comments on, among other things: (1) The economic 
impact of, and the continuing need for, the Funeral Rule; (2) the 
Rule's benefits to consumers; (3) and the burden it places on industry 
members subject to the requirements, including small businesses.

III. Issues for Comment

    To aid commenters in submitting information, the Commission has 
prepared the following questions related to the Funeral Rule. The 
Commission seeks comments on these and any other issues related to the 
Rule's current requirements. In their replies, commenters should 
provide any available evidence, including empirical analyses, that 
supports their position.

A. General Regulatory Review Questions

    1. Need: Is there a continuing need for the Rule? Why or why not?
    2. Benefits and Costs to Consumers: What benefits has the Rule 
provided to consumers? Does the Rule impose any significant costs on 
consumers? Please quantify these benefits and costs wherever possible.
    3. Benefits and Costs to Industry Members: What benefits has the 
Rule provided to businesses? Does the Rule impose any significant 
costs, including costs of compliance, on businesses, including small 
businesses? Please quantify these benefits and costs wherever possible.
    4. Impact on Information: What impact has the Rule had on the flow 
of truthful information to consumers and on the flow of misleading 
information to consumers?
    5. Compliance: Provide any evidence concerning the degree of 
industry compliance with the Rule. Does this evidence indicate that the 
Rule should be modified? If so, why, and how? If not, why not?
    6. Possible Recommended Changes: What modifications, if any, should 
the Commission make to the Rule to increase its benefits or reduce its 
costs? How would these modifications affect the costs and benefits of 
the Rule for consumers? How would these modifications affect the costs 
and benefits of the Rule for businesses, particularly small businesses?
    7. Unnecessary Provisions: Provide any evidence, including 
empirical analyses, concerning whether any of the Rule's provisions are 
no longer necessary. Explain why these provisions are unnecessary.
    8. Additional Unfair or Deceptive Practices: What potentially 
unfair or deceptive practices, not covered by the Rule, related to 
funeral goods and services, are occurring in the marketplace? Are any 
such practices prevalent in the market? If so, please describe such 
practices, including their impact on consumers. Provide any evidence, 
such as empirical data, consumer perception studies, or consumer 
reports, that demonstrates the extent of such practices. Provide any 
evidence that demonstrates whether such practices cause consumer 
injury, and quantify or estimate that injury if possible. With 
reference to such practices, should the Rule be modified? If so, why, 
and how? If not, why not?
    9. Product and Service Coverage: Should the Commission broaden the 
Rule to include products or services not currently covered? Provide any 
evidence that supports your position. What potentially unfair or 
deceptive practices related to products or services not covered by the 
Rule are occurring in the marketplace? Are any such practices prevalent 
in the market? If so, please describe such practices, including their 
impact on consumers. Provide any evidence, such as empirical data, 
consumer perception studies, or consumer reports, that demonstrates the 
extent of such practices. Provide any evidence that demonstrates 
whether such practices cause consumer injury, and quantify or estimate 
that injury if possible.

[[Page 8492]]

    10. Technological or Economic Changes: What modifications, if any, 
should be made to the Rule to account for current or impending changes 
in technology or economic conditions? How would these modifications 
affect the costs and benefits of the Rule for consumers and businesses, 
particularly small businesses?
    11. Conflicts with Other Requirements: Does the Rule overlap or 
conflict with other federal, state, or local laws or regulations? If 
so, how? Provide any evidence that supports your position. With 
reference to the asserted conflicts, should the Rule be modified? If 
so, why, and how? If not, why not? Are there any Rule changes necessary 
to help state law enforcement agencies combat deceptive practices in 
the funeral services market?
    12. Other State or Local Laws or Regulations: Are there state or 
local laws or regulations that lessen competition or impede consumer 
protection in the funeral-services market? Provide any evidence that 
supports your position. Should the Commission, through its advocacy 
work, encourage changes to these state or local laws or regulations? If 
so, what changes?

B. Specific Questions Related to the Funeral Rule

    13. Online and Electronic Price List Information:
    a. Should all funeral providers be required to post their itemized 
GPLs, CPLs or OBCPLs online? Why or why not?
    b. Should funeral providers that have websites be required to post 
their itemized GPL, CPLs or OBCPLs online? Alternatively, should they 
be required to provide an email address or other online mechanism for a 
website visitor to request the itemized price list information 
electronically and be subject to a time limit for replying to such 
requests? Why or why not?
    c. If a funeral provider makes funeral arrangements without an in-
person meeting (such as through a phone call, website, email, or text), 
should the funeral provider be required to provide an electronic copy 
of its itemized GPL, CPL, or OBCPL prior to a consumer making any 
selections? Why or why not?
    d. How would any of these suggested modifications affect the costs 
and benefits of the Rule for consumers and businesses, particularly 
small businesses? Please quantify or estimate these costs and benefits 
wherever possible.
    14. Casket and Outer Burial Container Information:
    a. Should funeral providers be required to provide the CPL and 
OBCPL at the same time as the GPL? Why or why not?
    b. Should funeral providers be required to combine the casket and 
outer burial container price information and disclosures into the GPL? 
Why or why not?
    c. Should funeral providers be required to give consumers copies of 
their CPL and their OBCPL to keep, as they are required to do for the 
GPL? Why or why not?
    d. How would any of these suggested modifications affect the costs 
and benefits of the Rule for consumers and businesses, particularly 
small businesses?
    15. Price List Format:
    a. Should funeral providers be required to provide their itemized 
price list information and disclosures in a standardized format? Why or 
why not? If so, how should a standardized format be developed and 
updated as the marketplace changes?
    b. Would a standardized format make it easier for consumers to 
review and compare itemized price list information from multiple 
providers? Why or why not?
    c. Would a uniform standardized format make it easier for funeral 
providers to prepare compliant itemized price lists, particularly small 
businesses? Why or why not?
    d. How would such modifications affect the costs and benefits of 
the Rule for consumers and businesses, particularly small businesses?
    e. If the Rule was modified to include a standardized format for 
some or all of the itemized price list information and disclosures, 
should use of such a form be a safe harbor for the Rule's price list 
requirements for a funeral provider? Why or why not?
    16. Cremation and Cremation-Only Funeral Providers:
    a. What percentage of consumers are choosing cremation each year? 
What is the annual dollar volume of sales for cremation services? How 
has that changed in the last five years, in the last ten years, and 
since the Rule was enacted?
    b. Should funeral providers be required to include the cost, or the 
range of costs, of any crematory fees that will be charged by outside 
providers for cremation on their itemized price list? Why or why not?
    c. What percentage of funeral providers offer only cremation 
services without any burial options as a final disposition? What 
percentage of funeral arrangements do these providers account for?
    d. What, if any, modifications should be made in the Rule's 
itemized price list and disclosure requirements for funeral providers 
offering only cremation services as a final disposition? Why? How would 
such modifications affect the costs and benefits of the Rule for 
consumers and businesses, particularly small businesses?
    17. New Forms of Cremation and Other Processes for Disposition:
    a. What new forms of cremation and other processes for the 
disposition of human remains (such as chemical and organic reduction 
processes) are available in the U.S. market? What percentage of 
consumers are choosing these newer options? How has that changed in the 
last five years? How many providers offer these new types of 
disposition services and what is the annual dollar volume of sales?
    b. What, if any, modifications should be made to the Rule in light 
of new and developing processes for human remains disposition? Why? 
Should the definition of ``cremation'' in the Rule be amended to 
reflect these new processes? Why or why not? How would such 
modifications affect the costs and benefits of the Rule for consumers 
and businesses, particularly small businesses?
    c. What types of alternative containers, if any, are needed or 
required for cremation and non-burial types of dispositions?
    d. Does the Rule's required disclosure regarding alternative 
containers need to be modified in light of new disposition options and 
the containers required? Why or why not?
    18. Non-Declinable Basic Services Fee: Should the Rule permit a 
non-declinable basic services fee? Why or why not? Provide any evidence 
that supports your position.
    19. Reduced Basic Services Fee for Direct Cremation and Immediate 
Burial:
    a. The Rule defines direct cremation as ``a disposition of human 
remains by cremation, without formal viewing, visitation, or ceremony 
with the body present.'' Should the Rule be modified to expressly 
permit the addition of other goods or services for consumers choosing 
direct cremation or other newer forms of human remains disposition 
without requiring payment of the full basic services fee? For example, 
should the Rule permit a funeral provider to charge a reduced basic 
services fee for a family choosing to have a loved one cremated but 
also wishing to have a limited viewing or visitation prior to or after 
the cremation?
    b. If changes should be made to the Rule to permit the addition of 
some goods or services to the direct cremation

[[Page 8493]]

or newer forms of human remains disposition arrangements without 
requiring the funeral provider charge the full basic services fee, what 
additional goods or services should be included? Why?
    c. If changes should be made to the Rule to permit the addition of 
some goods or services to the direct cremation or newer forms of human 
remains disposition arrangements without requiring the funeral provider 
to charge the full basic services fee, should such a change also be 
made to permit limited additional goods or services to immediate burial 
arrangements? Why or why not?
    d. How would such modifications affect the costs and benefits of 
the Rule for consumers and businesses, particularly small businesses?
    20. Mandatory Disclosures:
    a. Do the existing mandatory disclosures in the Rule convey to 
consumers an accurate understanding of their choices? Should any of the 
mandatory disclosures be modified to improve clarity? Why or why not?
    b. The current embalming disclosure begins with a caveat: ``Except 
in certain special cases, embalming is not required by law.'' The Rule 
provides that this italicized language ``need not be included in this 
disclosure if state or local law in the area(s) where the provider does 
business does not require embalming under any circumstances.'' Should 
the Rule be changed to prohibit the inclusion of the ``certain special 
cases'' caveat in locations where the state or local law does not 
require embalming? Why or why not?
    21. Funeral Rule Offender Program: What impact, if any, has the 
FTC's policy of referring first-time violators to the National Funeral 
Directors Association's Funeral Rule Offenders Program (FROP) for 
compliance review and training had on compliance with the Rule? Would 
publication of some or all of the names of those funeral providers 
participating in the FROP program increase compliance with the Rule? 
Would such publication benefit in other ways consumers shopping for 
funeral services? Why or why not?
    22. Cemeteries:
    a. Should the Commission broaden the Rule to apply to cemeteries? 
Why or why not? Identify any specific practices by cemeteries, such as 
failing to provide itemized price information or making any 
misrepresentations to consumers, that an extension of the Rule could 
address to protect consumers. Provide any evidence that demonstrates 
whether such practices cause consumer injury and quantify or estimate 
that injury if possible. Are any such practices prevalent? If so, 
provide any evidence, such as empirical data, studies, or reports, 
which demonstrates the extent of such practices.
    b. What percentage of cemeteries are for-profit and therefore would 
fall within the FTC's jurisdiction? What, if any, concerns would arise 
if the Commission extended the Rule to for-profit cemeteries, but not 
non-profit cemeteries? What would the costs and benefits be to 
consumers and cemetery providers if the Commission extended the Rule to 
cemeteries? Provide evidence to support your conclusions.

IV. Instructions for Submitting Comments

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before April 14, 2020. 
Write ``Funeral Rule Regulatory Review, 16 CFR part 310, Project No. 
P034410'' on your comment. Your comment, including your name and your 
state, will be placed on the public record of this proceeding, 
including, to the extent practicable, on the https://www.regulations.gov website.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it through https://www.regulations.gov, 
by following the instructions on the web-based form provided.
    If you file your comment on paper, write ``Funeral Rule Regulatory 
Review, 16 CFR part 310, Project No. P034410'' on your comment and on 
the envelope, and mail your comment to the following address: Federal 
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, 
Suite CC-5610 (Annex B), Washington, DC 20580, or deliver your comment 
to the following address: Federal Trade Commission, Office of the 
Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 
5610, Washington, DC 20024. If possible, please submit your paper 
comment to the Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible 
website, https://www.regulations.gov, you are solely responsible for 
making sure that your comment does not include any sensitive or 
confidential information. In particular, your comment should not 
include any sensitive personal information such as your or anyone's 
Social Security number, date of birth, driver's license number or other 
state identification number or foreign country equivalent, passport 
number, financial account number, or credit or debit card number. You 
are also solely responsible for making sure that your comment does not 
include any sensitive health information, such as medical records or 
other individually identifiable health information. In addition, your 
comment should not include any ``[t]rade secret or any commercial or 
financial information which . . . is privileged or confidential''--as 
provided in Sec.  6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 
4.10(a)(2), 16 CFR 4.10(a)(2)--including in particular competitively 
sensitive information such as costs, sales statistics, inventories, 
formulas, patterns, devices, manufacturing processes, or customer 
names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted publicly at https://www.regulations.gov--as legally 
required by FTC Rule 4.9(b)--we cannot redact or remove your comment, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website to read this request for comment and the news 
release describing it. The FTC Act and other laws that the Commission 
administers permit the collection of public comments to consider and 
use in this proceeding as appropriate. The Commission will consider all 
timely and responsive public comments that it receives on or before 
April 14, 2020. For information on the Commission's privacy policy, 
including routine uses permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

    By direction of the Commission.
April J. Tabor,
Acting Secretary.
[FR Doc. 2020-02803 Filed 2-13-20; 8:45 am]
BILLING CODE 6750-01-P