The article discusses funeral homes being charged with long-term fraud related to pre-paid funeral contracts. It notes numerous consumer complaints about fraud, abuse, and high-pressure sales tactics aimed at the elderly. While pre-paying is meant to ease the burden on loved ones, salespeople often fail to disclose that the contracts don't actually cover all costs. The article also discusses a bill sponsored by Congressman Steve Southerland to exempt pre-paid funeral assets from being counted against eligibility for public assistance. However, critics argue the bill benefits Southerland's funeral home business and the industry. There are concerns that pre-paying funerals may not be a good financial decision for consumers.

1. ABC-NEWS June 23, 2012
Funeral homes charged with long-term Fraud
It sounds like a simple way to make the inevitable more manageable: Prepay for
funeral services, so your loved ones have one less thing to worry about when the
day comes.
"I've just had so many families mention to me, 'Mike, I am so glad that we did this
years and years ago, because everything was taken care of exactly as we wanted it
to be done,'" says Mike Ruck of the National Funeral Directors Association.
But there have been numerous consumer complaints about pre-paid funeral
contracts, specifically complaints about fraud, abuse and high-pressure sales tactics
aimed at the elderly.
"They're after money and they just see this population as out there and vulnerable
and easy to get at," says Tess Canja, the national president of the American
Association of Retired Persons (AARP).
Irwin Karp agrees — and he should know. The former salesman recently testified
before Congress from a California prison where he's serving time for mishandling
funds from pre-paid contracts.
He told ABCNEWS: "The salespeople obviously have mortgages, have car payments,
etc. So if they get somebody who is not completely aware of everything or is not that
intelligent, they go for as much as they can get."
Salespeople often fail to tell their elderly customers the contracts — which
supposedly cover every detail — often don't cover flowers, burial costs, vaults and
police escorts.
Once Bought, Contract is Binding
"My mother and daddy purchased this policy in 1971 to relieve me of any financial
responsibility since I was their only child," explains Bush.
But when her mother died 28 years later, Bush had to use a different funeral home
because they had moved to a different city. The original funeral home returned her
original investment but kept 28 years' worth of interest.
And it's perfectly legal. In most states, it is the funeral home — not the customer —
that owns the interest on pre-paid funeral contracts. What's more, the family has to
pay the taxes on that interest.

2. "What this seems like to me is more of an institutionalized scam," says Rob
Schneider of the Consumers Union, "where state laws give earnings that rightfully
belong to consumers to the funeral services industry."
When Ruck was asked how he makes the case that this isn't a bad business decision
on the part of families, he finally answered after a long pause: Peace of mind.
The funeral industry says it's pushing new guidelines to protect consumers of pre-
paid contracts. But consumer groups say if you really want to plan ahead for your
funeral, just open a savings account.
WASHINGTON June 24, 2012
Dems attack Southerland funeral legislation as self-serving
WASHINGTON — As a third-generation funeral-home owner, Steve Southerland
said he understands how the rising cost of burials can squeeze low-income families.
As the congressman from Florida’s second district, he’s in a position to do something
about it.
So when the National Funeral Directors Association approached him last year with a
legislative proposal to help low-income families who want to preplan a funeral, the
freshman Republican from Panama City signed on.
The bill Southerland has sponsored would codify an existing rule that exempts
certain prepaid burial plans from being counted as an asset for people who apply for
public assistance. Southerland says the rule makes sense and should become law to
keep preplanned funerals a viable option for poorer Americans.
“The primary reason people do this, having done this with hundreds and hundreds
and hundreds of families, is for peace of mind,” Southerland said in a recent
interview.
Democrats pounced.
The bill, they said, would benefit the congressman’s business, Southerland Family
Funeral Homes. They also noted that the proposal is the only bill Southerland
introduced in 2011. They brought up the $5,000 contribution the National Funeral
Directors Association gave his campaign last year. And they cited skeptics who
question whether prepaid funerals really are a good deal for consumers.
“Congressman Southerland campaigned on reforming Washington, but it’s clear that
all he’s done is gone Washington,” said David Bergstein, a spokesman with the
Florida Democratic Party. “While he was supposed to be working for us, Southerland
has spent his time pushing legislation that benefits himself, his company and his
campaign contributors, and this self-serving agenda perfectly demonstrates what’s
wrong with Congress.”

3. The issue speaks to the election-year partisan rancor that permeates congressional
politics: A largely technical bill that has bipartisan backing and would maintain the
status quo is bashed by opponents as a nest-feathering opportunity.
Page
It also suggests that Democrats believe Southerland, elected in 2010 in an anti-
Democratic wave, is vulnerable in November. Democratic Congressional Campaign
Committee officials already have reserved $828,000 of television air time for use
after Labor Day for possible ads aimed at unseating him.
The funeral controversy revolves around irrevocable funeral trusts, plans where
families or individuals sign a binding contract to cover the costs of a future burial or
cremation.
The plans have grown in popularity as the elderly have tried to take more control of
their funeral arrangements and shield their children from having to make expensive,
last-minute decisions while dealing with grief.
Irrevocable prepaid funeral plans are often valued at several thousand dollars and,
unlike traditional plans, cannot be cashed in or canceled. If they were to count as an
asset, many who bought them might fail to qualify for certain types of means-tested
federal subsidies such as Medicaid assistance for nursing home care.
In Florida, for example, someone whose monthly income is $820 or less wouldn’t
qualify for nursing home assistance if the value of their assets exceeded $5,000.
Individuals whose monthly income is no more than $2,094 would not be eligible if
their assets exceeded $2,000. Primary residences are not counted in the asset
calculation.
“It sounds like a self-serving bill, doesn’t it?” Southerland said sarcastically.
Southerland and other supporters of the prepaid plans say they also save taxpayer
money. Such plans keep local and state governments from having to cover the cost
of body disposal - governments often opt for the cheaper option of cremation - when
relatives can’t afford to do it themselves.
“This makes sense because it rewards fiscal responsibility,” said Chris Averill, a
spokesperson for Sen. Olympia Snowe, a Maine Republican who is sponsoring the
same bill in the Senate. “It encourages people to protect their families and the
taxpayers from the costs of their burials.”
But some consumer groups and personal finance experts warn that prepaying
doesn’t make much sense and that unscrupulous funeral homes or cemeteries might
try to take advantage of mourning families by charging more.
Some states allow funeral homes to charge exorbitant, non-refundable commissions
- up to 30 percent in Florida - for prepaid plans that are often poorly regulated and
leave consumers little room if they want to change their funeral arrangements later
on, said Joshua Slocum, executive director of the Vermont-based Funeral Consumers
Alliance.

4. “Our position is please preplan but please don’t prepay,” Slocum said. “The only
people who endorse prepaid funerals wholeheartedly are those who have an interest
in selling them.”
A typical funeral costs about $7,000, not including burial at a cemetery, he said.
And Democrats say Southerland is motivated by greed.
The more prepaid funeral plans he sells, they say, the better for his business.
Southerland made more than $22,000 in commissions in 2009 and 2010 from
Forethought Life Insurance Company, which handles prepaid funeral insurance,
according to Southerland’s financial disclosure reports.
Southerland says he actually loses money on the vast majority of prepaid funerals
because the money paid in advance rarely grows fast enough to cover the cost of the
funeral by the time it’s held. In those cases, his business usually covers the
difference. He said the loss is “significant” but declined to go into details.
“It’s a problem in our industry,” he said. “Our situation is consistent with the
shortfalls of funds in funeral homes everywhere. Ours is not unique.”
Southerland said he has not collected any insurance commissions since he was
elected and said he gave up his insurance license when he ran for Congress.
His company, which was valued at between $250,001 and $500,000 in his 2010
financial disclosure report, operates funeral homes in Panama City, Lynn Haven and
Port Saint Joe.
Supporters of making the asset exemption for pre-planned funerals permanent have
persuaded lawmakers in the past to sponsor the legislation. But it’s usually been
tucked into larger, more controversial bills that have died in Congress.
So the supporters, led by the funeral directors’ trade group, tried a different tack this
year: backing a stand-alone measure.
John Fitch, chief Washington lobbyist for the National Funeral Directors Association,
approached two people he thought would be willing and suitable sponsors: Snowe,
representing a state where many funeral homes had raised concerns, and
Southerland, whose background in the business made him “a natural,” Fitch said.
The bill has gone nowhere, even though Southerland and Snowe have signed up
Democrats to help the effort. That’s not a surprise, considering that relatively few
bills move forward in a Congress marked by partisan rancor.
Fitch said there’s no sign the rule saying prepaid funerals aren’t counted as an asset
in calculating government assistance will change anytime soon. But funeral homes
don’t want to take that chance.
“The biggest fear is that you have an election coming up and have the possibility of a
change in administration,” he said.

5. Everest Accuses Funeral Directors of Violating Funeral Rule
Posted: June, 20 2012
Everestfuneral.com is a funeral planning and concierge service that sells funeral
pricing reports to consumers based on information obtained from funeral homes.
Over the years, Everest has contacted many NFDA-member funeral homes asking
the funeral home to provide pricing information.
In recent weeks, NFDA has received numerous reports from funeral homes
throughout the country that received letters from Everest accusing them of not
complying with the FTC Funeral Rule because they did not respond to the company's
attempts to obtain pricing information. Everest has employed this same tactic many
times in recent years.
According to advice previously given by NFDA General Counsel Scott Gilligan, if you
receive a call from Everest, or anyone else, asking for pricing information, you have
certain obligations under the Funeral Rule:
• Disclosing Prices Over the Phone: The Funeral Rule requires funeral
directors to answer telephone inquiries regarding funeral services and prices.
Therefore, if you receive a call from an Everest representative - or any
consumer, for that matter - inquiring about the cost of various goods and
services, you MUST provide that information over the telephone. This
requirement applies even though Everest is not a consumer; you are required to
provide this information to anyone who calls regardless of whether the caller is a
consumer.
• Mailing or Faxing a Price List: The Funeral Rule only requires funeral
homes to distribute a GPL if there is a face-to-face discussion involving funeral
prices, arrangements, services or goods. Therefore, you are not required to mail
or fax your GPL to Everest or anyone else who calls and requests a price list. It
is up to you to determine whether you want to honor that request, but you are
not required to do so.
Should you have questions or concerns, NFDA members can contact Gilligan for a
free consultation on their obligations to provide pricing information. Gilligan can be
reached at 513-871-6332.
FTC Sues Funeral Home for Continuing Failure to Disclose Prices
Posted: June 11, 2012
Less than a month after releasing data about its 2011 undercover inspections, the
FTC announced that it was charging a funeral home with violating the Funeral Rule
and seeking $80,000 in civil penalties.
According information released by the FTC, on two occasions, the defendant,
Harrison Funeral Home Inc. in Harrison, N.Y. (not an NFDA member), allegedly failed
to provide an itemized price list at the start of an in-person discussion of funeral
arrangements, and a casket price list before showing caskets, as the Funeral Rule
requires. According to the FTC's complaint, the defendants also violated the Rule by
failing to provide an outer burial container price list before showing any outer burial
containers.
This was the second FTC enforcement action against Harrison Funeral Home;
allegedly, the firm committed these latest Funeral Rule violations after being given
an opportunity to take compliance training to resolve prior price disclosure citations.

6. The FTC conducts undercover inspections across the country every year to ensure
that funeral homes are complying with the Funeral Rule. In 2011, the FTC detected
significant violations of Federal Trade Commission consumer protection requirements
in 23 of 102 funeral homes they visited; additionally, 33 funeral homes were found
to have minor compliance deficiencies. Since the FROP program began in 1996, the
FTC has inspected more than 2,500 funeral homes and found fewer than 400
engaged in significant Rule violations.
June 21, 2012
FTC Sues Funeral Home for Continuing Failure to Disclose Prices
New York Funeral Home Previously Cited for Price List Violations in 2001
The Federal Trade Commission has charged a funeral home with violating the FTC's
Funeral Rule, which helps people compare prices and buy only the funeral services
and goods they want. The case is part of the FTC's continuing efforts to make sure
consumers are treated fairly when arranging a funeral. It is the second FTC
enforcement action against a funeral home that has allegedly committed Funeral
Rule violations after being given an opportunity to take compliance training to
resolve prior price disclosure citations.
The government seeks $80,000 in civil penalties from Harrison Funeral Home Inc. in
Harrison, New York, and its owner, John Balsamo. On two occasions, the defendants
allegedly failed to provide an itemized price list at the start of an in-person
discussion of funeral arrangements, and a casket price list before showing caskets,
as the Funeral Rule requires. According to the FTC's complaint, the defendants also
violated the Rule by failing to provide an outer burial container price list before
showing any outer burial containers.
The FTC conducts undercover inspections across the country every year to ensure
that funeral homes are complying with the Funeral Rule. First-time offenders cited
for such significant violations are offered a chance to enter the Funeral Rule
Offenders Program (FROP), a three-year training program designed to increase
compliance, as an alternative to possible legal action, a court order, and civil
penalties of up to $16,000 per violation. The FROP program is run by the National
Funeral Directors Association and provides participants with a legal review of the
price disclosures required by the Funeral Rule, and ongoing training, testing and
monitoring of their compliance. Participants must make a voluntary payment to the
U.S. Treasury in place of a civil penalty, and pay annual administrative fees to the
Association. The defendants are not currently eligible to participate in the FROP
program because in 2001, when they were cited for failing to provide price lists as
required by the Rule, they agreed to enter the program but never participated.
The Funeral Rule, enacted in 1984, gives consumers important rights when making
funeral arrangements. Key provisions of the Rule require funeral homes to provide
consumers with an itemized price list at the start of an in-person discussion of
funeral arrangements, as well as a casket price list before consumers view any
caskets. The Rule also prohibits funeral homes from requiring consumers to buy any
item, such as a casket, as a condition of obtaining any other funeral good or service.

7. The Rule requires funeral homes to provide itemized prices so that consumers can
compare prices and buy only the goods and services they want.
For more information about the Funeral Rule, read Paying Final Respects: Your
Rights When Buying Funeral Goods & Services, Funerals: A Consumer Guide,
and Complying with the Funeral Rule.
The Department of Justice filed the complaints on behalf of the Commission in the
U.S. District Court for the Southern District of New York on May 10, 2012. The
Commission vote to refer the complaints to the DOJ for filing was 5-0.
NOTE: The Commission refers a complaint to the DOJ for filing when it has "reason
to believe" that the law has been or is being violated, and it appears to the
Commission that a proceeding is in the public interest. The complaints are not a
finding or ruling that the defendant has actually violated the law. The cases will be
decided by the court.
The Federal Trade Commission works for consumers to prevent fraudulent,
deceptive, and unfair business practices and to provide information to help spot,
stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s
online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC
enters complaints into Consumer Sentinel, a secure, online database available to
more than 2,000 civil and criminal law enforcement agencies in the U.S. and
abroad. The FTC’s website provides free information on a variety of consumer
topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press
releases for the latest FTC news and resources.
National Funeral Directors Association Statement: 60 Minutes Story on
Cemetery Practices
For Immediate Release: May 21, 2012
Brookfield, Wis. – On May 20, 2012, the CBS program 60 Minutes aired a story that
highlighted the disgraceful treatment of human remains at some cemeteries in the
United States. The members of the National Funeral Directors Association (NFDA)
extend their condolences to all those whose loved ones were not properly cared for
by a cemetery. NFDA members believe that funeral professionals have an ethical
obligation to treat each deceased person with the highest respect and dignity at all
times.
The 60 Minutes story reinforces NFDA's long-held position that the Federal Trade
Commission's (FTC) Funeral Rule, a federal consumer protection regulation that all
funeral homes must abide by, should be revised and updated so that key consumer
protection elements also apply to cemeteries, crematories and all third-party sellers
of funeral or burial goods and services. To that end, NFDA supports Rep. Bobby
Rush's (D-IL) legislative efforts to direct the FTC to adopt regulations that would
govern other providers of deathcare goods and services.
This change is long overdue. Given a dramatically changed marketplace – with new
and non-traditional sellers offering consumers many more options for purchasing
funeral or burial goods or services – consumers face risk when dealing with sellers
that operate in a lightly, or even unregulated environment.

8. An updated Funeral Rule would bring the essence of what funeral directors do – and
the high ethical and professional standards that NFDA members live by every day –
to a federal level for all providers of funeral and burial goods and services. It would
provide minimum, uniform standards, regardless of state law, and, most importantly,
help protect consumers.
FTC Conducts Undercover Inspections of Funeral Homes in Nine States to
Press Funeral Homes to Comply with Consumer Protection Law
FTC's Funeral Rule Requires Funeral Homes to Provide Price Lists to
Consumers
Investigators working undercover in nine states detected significant violations of
Federal Trade Commission consumer protection requirements in 23 of 102 funeral
homes they visited during 2011 and 2012. The FTC conducts undercover inspections
every year to make sure that funeral homes are complying with the agency's Funeral
Rule. The Rule, issued in 1984, gives consumers important rights when making
funeral arrangements. Key provisions of the Rule require funeral homes to provide
consumers with an itemized price list at the start of an in-person discussion of
funeral arrangements, as well as a casket price list before consumers view any
caskets. The Rule also prohibits funeral homes from requiring consumers to buy any
item, such as a casket, as a condition of obtaining any other funeral good or service.
By requiring itemized prices, theFuneral Rule enables consumers to compare prices
and buy only the goods and services they want.
Funeral homes with significant violations can enter a training program designed to
increase compliance with the Funeral Rule. The three-year program is known as the
Funeral Rule Offenders Program (FROP), and is an alternative to an FTC lawsuit that
could lead to a federal court order and civil penalties of up to $16,000 per violation.
It is run by the National Funeral Directors Association and provides participants with
a legal review of the price disclosures required by the Funeral Rule, and on-going
training, testing and monitoring for compliance with the Rule. In addition, funeral
homes that participate in the program make a voluntary payment to the U.S.
Treasury in place of a civil penalty, and pay annual administrative fees to the
Association.
FTC inspections encountered varying levels of compliance:
• In Northwest Indiana, one of 12 funeral homes inspected had significant
violations;
• In Maui, Hawaii, none of the four funeral homes inspected had significant
violations;
• In the New York City area, as well as parts of Connecticut and New Jersey,
one of 22 funeral homes inspected had significant violations;
• In Cleveland, Ohio, four of 16 funeral homes inspected had significant
violations;
• In Columbia, South Carolina, five significant violations were found in 10
funeral homes inspected;
• In Austin, Texas, four of 19 funeral homes inspected had significant
violations; and
• In Richmond and Fredericksburg, Virginia, eight of 19 funeral homes
inspected had significant violations.

9. In addition, the FTC identified 33 funeral homes, within the nine states, with only
minor compliance deficiencies. In such cases, the FTC contacts the funeral home and
requires it to provide evidence that it has corrected the problems.
Since the FROP program began in 1996, the FTC has inspected more than 2,500
funeral homes and found fewer than 400 engaged in significant Rule violations. In
conducting its annual enforcement sweeps, the agency has received assistance from
several state attorneys general. This year, the FTC wishes to thank Ohio Attorney
General Mike DeWine for the valuable assistance provided by his office.
Re-released updates on defendants in IFDA fraud case. June 14, 2012
The National Funeral Directors Association Executive Secretary, has
been named in a fourth lawsuit for Fraud. Randal L Earl of Britlinger and Earl
Funeral Homes in Decatur, Illinois is on the executive board of the National Funeral
Directors Association (NFDA).
One individual may eliminate the integrity of the professional
organization for Funeral Directors in America. How can the Board of Directors of
the NFDA stand for it? How can the CEO of the National Funeral Directors
allow this? Certainly Christine Pepper the CEO should be concerned. For one man
she is risking the organization? Why risk the same fate as the Illinois Funeral
Directors Association
Here is the Link to the latest lawsuit submission.
Here are the names of the defendants listed in the Court Document:
“I.F.D.A. Services, Inc., Illinois Funeral Director’s Association, Linda Allan,
James D. Bosma, Kevin Burke, Charles S. Childs, Jr., Mark K. Cullen, Brent M.
Davis, Dennis R. Davison, Steven Dawson, Vickie Diedrich, Paul G. Dixon,
Randall L. Earl, Michelle Harrison, Donald Henderson, Geoffrey W. Hurd, Derek S.
Johnson, Robert Konzelmann,Jack R. Kynion, David M. McReynolds, Robert W.
Ninker, Michael Sayles, Edward Schainker, King Sutton, Eric R. Trimble, Chris
Wooldridge, Richard D. Yurs, Merrill Lynch Pierce Fenner & Smith, Inc., U.S.
Bancorp and Sikich LLP”
If you hug a Funeral Director make sure he/she is not named in a lawsuit
Take it as you will, Randall L Earl, should resign in the interest of all the Funeral
Directors in the Land.