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Death Industry Predators Eye the Spoils of a Pandemic

An important federal regulation that protects funeral services consumers is coming on the chopping block at the worst possible time.

Miguel Medina/Getty Images

It’s hard to look at Robert Waltrip, the 89-year-old founder and chairman emeritus of death-care giant Service Corp International and not see a striking resemblance to Henry Waternoose, the CEO of the fictional “Monsters, Inc.” from the Pixar movie of the same name—in terms of looks and the fact that both men’s businesses involved profiting from the wailing of the most vulnerable. Under Waltrip’s leadership, SCI snaked its tendrils from its home state of Texas to suction up family-run funeral homes across the country, transforming itself into a death-industry leviathan that owns close to a quarter of all funeral homes nationwide and that has never been in short supply of accusations of consumer malpractice.

Now, amid a global pandemic that even optimistic prognosticators believe could result in more lives lost and buried than during the Korean and Vietnam wars combined, companies like SCI could be on the verge of something truly monstrous. After nearly a half-century of regulatory oversight, the Federal Trade Commission’s Funeral Rule is up for its 10-year review next month. That rule had traditionally served as the main bulwark of consumer protection against the outrageous business practices that are a hallmark of the funeral industry’s more predatory firms. But death-dealers like SCI have spent a tidy fortune lobbying against these consumer safeguards, and with a conservative-leaning FTC board set to decide the rule’s fate, it seems likely that the existing regulations will be defanged to their liking. And it will all go down just as America’s pain becomes a rich vein of profit for the industry to tap.

The FTC’s Funeral Rule was enacted in 1984 to prohibit the egregious price-gouging and hidden fees that funeral industry firms formulated to ambush consumers at their most vulnerable: after the death of a loved one. Before the rule, funeral homes were notorious for extorting grieving families through a host of shady practices, which included making false statements about the necessity of embalming, hiding prices in every step of the burial and cremation processes, and framing expensive caskets and urns as the most “modestly priced receptacles.”

By the mid-1980s, the need for reform had already long been apparent. In 1963, investigative journalist Jessica Mitford wrote The American Way of Death, which chronicled the unconscionable practices that she observed as commonplace in the funeral industry. In its pages, Mitford warned of how these abuses might escalate as larger, consolidated firms took over the industry.

“No matter what the eventual development of the funeral industry—whether it remains overcrowded or moves, as it seems inevitable, in the direction of the large supermarket type of operation,” Mitford wrote, “there is cold comfort for the consumer. Once having driven out their small competitors, there is no reason to believe the big volume concerns will demonstrate a more tender regard for the pocketbooks of their customers than has traditionally been the case in the Dismal Trade.”

Just as Upton Sinclair’s The Jungle aided in the passage of the Meat Inspection Act decades earlier, and Silent Spring enabled the creation of the Environmental Protection Agency, Mitford’s exposé helped pave the way for the Funeral Rule by revealing the systematic abuses of the funeral industry. While the FTC continues to find plenty of violators to fine, and watchdog groups like the Funeral Consumers Alliance continue to police the industry’s malpractices, the Funeral Rule has nevertheless had a lasting and beneficial impact on consumers.

There is, perhaps, no better evidence of this truth than the vast amount of capital that firms have deployed to gut the rule. Data published by ProPublica shows that lobbyists representing the funeral industry have spent tens of thousands of dollars to exert pressure on the FTC to amend the rule, edging open the floodgates to gouge consumers on everything from casket prices to embalming fees. Should an amendment or elimination of the rule pass, it could mean the near-total deregulation of an industry that has long awaited a return to its lucrative and deceptive pre-1984 practices.

In the midst of the coronavirus pandemic, which could see more than a 20 percent increase in annual deaths on American soil, it’s hard to imagine a worse time to roll back consumer protections on funeral services. Conservative estimates place America’s coronavirus death toll at 200,000, which suggests that in the absence of mass burials, there is likely to be a massive uptick in business for funeral homes, cemeteries, and crematoriums. Already, increased restrictions on community gatherings due to the coronavirus pandemic have forced funeral homes to pivot to virtual funerals, in which they scrap traditional in-person viewings while maintaining their premium fees.

Despite switching over to live-streamed eulogies and teleconference interments in recent weeks, funeral homes are still not required to post their prices online under the Funeral Rule, making it easier to slip in hidden fees and take advantage of mourners struggling to make final arrangements. (A study conducted by the national Funeral Consumers Alliance found many funeral homes make it difficult or impossible to find prices online.) Of the 256 comments posted on the FTC’s open comments portal, almost all advocate not only to keep the Funeral Rule but to enhance it further with a provision mandating that funeral homes provide their pricing online. It’s a service that is becoming increasingly necessary as in-person visits to funeral homes and cemeteries carry an increased risk of contracting the coronavirus.

As one commenter, Tim Newlin, stated bluntly to the FTC, “Although a single corporation has been buying up ‘mom and pop’ funeral homes for decades—maintaining the local brand and effectively eliminating options and competition—it is still useful for consumers to make some sense out of their fee schedules. People are stressed enough when their blood relatives die, posting actual prices on their websites is a reasonable expectation to have of a business.”

Alterations to the Funeral Rule rest in the hands of the five FTC commissioners appointed by Donald Trump in 2018. According to the law, two of these commissioners must be from the opposition political party of the sitting president. The three Republican commissioners include Joseph Simons, a former Bush-appointed FTC consumer protection director; Noah Phillips, a former counsel to Senator John Cornyn of Texas with a career-long fealty to deregulation; and Christine Wilson, a former Delta Airlines executive. The two Democratic board members are Kelly Slaughter, former adviser to Senator Chuck Schumer, and Rohit Chopra, former assistant director of the (now gutted) Consumer Financial Protection Bureau.

If the FTC’s last regulatory review is anything to go by, the odds for the Funeral Rule’s survival seem slim to none. In June of last year, the FTC reviewed its guides for the plant-nursery industry. That review was centered on the regulation of plant sales, with a specific focus upon deceptive marketing practices that firms in that industry deployed to mislead consumers. Ultimately, the FTC voted along party lines 3–2 to roll back its oversight of the industry.

The Funeral Rule is likely headed down the same path. Nevertheless, Commissioner Chopra is making a game attempt to use the upcoming review as an opportunity, however limited, to address the problems that the existing rule has overlooked.

In a quietly seething memo, Chopra wrote, “I am particularly interested in an examination of the Funeral Rule Offenders Program (FROP), a program launched in 1996 and operated by the National Funeral Directors Association (NFDA), an industry lobbying group. When our undercover inspections find that funeral homes are not providing families with information required under the law, these funeral homes are almost always given the opportunity to pay fees to the government and to NFDA in order to enroll in the FROP and avoid a formal enforcement action by the FTC. The FTC also withholds the names of these lawbreaking funeral homes from the public when announcing the results of funeral home inspections, a privilege that no other industry under FTC jurisdiction enjoys. During this review, we will need to assess whether this arrangement is appropriate.”

While it remains to be seen whether the funeral industry will attempt to violate the oversight of the FTC by price-gouging a wave of bereaved consumers in the coming weeks, the FTC’s open comment period for the funeral rule ends on April 14, meaning that a vote on the Funeral Rule could be delivered as early as this spring, during the height of the pandemic. This could give industry profiteers the green light to stick consumers with bills far surpassing the $1,200 checks promised by the federal government. If the industry’s scandalous history—and the FTC’s current leanings—are any guide, a feeding frenzy for industry vultures may lie just ahead.