ICFA Testifies at Senate Committee Hearings on Funeral/Burial Industry
by Robert M. Fells, Esq., General Counsel
On April 10 and 11, the Senate Special Committee on Aging held hearings to explore the practices of funeral homes, cemeteries, and preneed sellers. This occasion apparently marked the first time since the 1960s that a Congressional committee has investigated funeral-related industries through public hearings. Consumer witnesses and industry critics testified during the first day. They were followed on the second day by a Federal Trade Commission representative, a California state regulator, NFDA and the ICFA. The hearings were broadcast over cable television by C-Span and can be downloaded on the Aging Committee's website.
The ICFA staff worked closely with committee staff and our association was represented by Paul Elvig, ICFA secretary and board member, State Legislation and Association Committee chairman, and vice president with Evergreen-Washelli Memorial Park and Funeral Home, Seattle, Washington. Elvig's testimony is reviewed below. The Committee on Aging is chaired by Sen. Charles E. Grassley (R-Iowa), working together with ranking member Sen. John Breaux (D-Louisiana) in a bipartisan manner. Grassley stated that the hearing was not a "gotcha" type of event and noted the high level of cooperation the industry provided. Sens. Grassley and Breaux were cordial to all witnesses and industry representatives.
The first witness, Irwin Karp, was a convicted felon who had sold preneed cremation services and testified via video conferencing from a California prison. Karp discussed what he saw as several shortcomings that existed in California law circa 1990. He seemed unaware that since that time most of these issues had been addressed and enforcement efforts increased. The consumer witnesses offered detailed accounts of various problems, including a crypt leaking fluids in a Pennsylvania mausoleum, a California cemetery that illegally disinterred remains and resold the lots, and an elderly Florida woman (as told by an independent funeral director) who had signed a series of preneed agreements totaling $132,000.
The industry critics included Darryl Roberts; Father Henry Wasielewski; Lamar Hankins, president of the Funeral and Memorial Societies of America (FAMSA); and former AARP Board Chairman Dr. Robert Shreve. After reading his testimony, Roberts did not remain for questioning. Father Wasielewski alleged, among other things, the prevalence of what he termed "clergy-mortuary bribery." Many of the FAMSA and AARP remarks were anticipated and rebutted by the ICFA's written testimony. Under questioning, AARP's Shreve agreed with the ICFA position that the FTC Funeral Rule is an inappropriate regulatory vehicle to apply to cemeteries, although he believed that all sellers should be federally regulated.
Government and Industry Testimony
On the second day of the hearings, the FTC's Eileen Harrington, associate director of marketing practices, gave an overview of the commission's consumer protection activities through the FTC Act and the Funeral Rule. Harrington chaired the Funeral Rule Review Public Workshop last November (see the January "Washington Report" column for details). G.V. Ayers, California Department of Consumer Affairs, discussed his agency's enforcement efforts and the benefits of one agency having oversight of funeral homes, cemeteries and crematories.
The NFDA witness, Jay U. Jacobson, was an Iowa funeral director apparently personally acquainted with Senator Grassley. Jacobson criticized the committee and said he was "shocked by the lack of credible funeral service professionals invited here to give testimony." Later, in response to a question by Grassley, Jacobson criticized Sen. Grassley and the committee personally for not defending the industry. An obviously angry Sen. Breaux responded a few minutes later saying that he was offended by the remarks and that Jacobson did not serve his association or his industry well by such an attack. "You just don't speak for yourself, but for 14,000 funeral directors," Breaux said. "Four to five people say they have complaints and now it's your day" to respond. Breaux stated, "You can't say the only people we should have at the hearing are funeral home owners."
The ICFA was the final witness and Paul Elvig provided positive, proactive testimony. Elvig complimented the senators and said "we're proud of what you're doing here today." He urged state regulation over federal intervention and, picking up on Grassley's idea about developing model rules for the states, discussed the ICFA Model Guidelines for State Laws and Regulations. Elvig responded to the issue of making preneed contracts portable, discussing the complexities and comparing it to transferring airline tickets from one carrier to another. He pledged that the ICFA will work with the committee on this issue.
Elvig strongly advocated the use of prearrangements and prefunding "to assure consumers that they can control the events around them." He took "strong exception to the notion that people won't complain" if they have experienced a problem with an industry member and pointed to the fact that the committee received "testimony from a man behind bars says the system works." The FTC's Harrington agreed that there are few consumer complaints when compared to other professions and industries.
In addition, the ICFA's written testimony discussed the findings of the U.S. General Accounting Office's 1999 investigative report of the industry, particularly the finding of low numbers of consumers complaints. The ICFA stated that "consumer education is the key to consumer protection. There exists a wide variety of options and price ranges for consumers to consider.... This information is widely disseminated by industry members, consumer groups, memorial societies and, increasingly, through the internet. The types of arrangements selected will vary according to each individual based on his or her personal preferences, ethnic background, and religious beliefs. Obviously, these decisions should not be made under the stress and bereavement of a death, or even an imminent death, in the absence of adequate thought and planning. The greatest challenge confronting the goal of consumer protection is the necessity for consumers to explore their options before the need arises."
The ICFA submitted a number of exhibits with its written testimony, including consumer and state law surveys. The testimony concluded by stating, "ICFA encourages states to develop uniform laws through its Model Guidelines and works actively with federal, state and consumer organizations, such as the Better Business Bureau, to quickly resolve consumer complaints and to prevent problems from occurring. Indications from all reliable sources, including the GAO investigative report, show persuasively that consumer problems are low in volume and are efficiently resolved."
While it is premature to speculate on any follow-up action by the Aging Committee, the ICFA has submitted comments discussing various issues raised during the hearings. The committee is expected to publish a report and recommendations within the next few months.