1

 16 C.F.R. § 453.2(b)(4)(iv).

2

 16 C.F.R. § 453.3(d)(2). Staff is not aware of any such external requirement mandating

that funeral providers charge consumers for collecting insurance or trust proceeds.

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

Division of Marketing Practices

~

Craig Tregillus Direct Dial: (202) 326-2970

ctregillus@ftc.gov Facsimile: (202) 326-3395

January 3, 2013

Ms. Kathleen K. Ryan, General Counsel

Pennsylvania Funeral Directors Association

7441 Allentown Blvd.

Harrisburg, PA 17112-9982

Mr. O. C. Robbins, Executive Director

Texas Funeral Service Commission

P. O. Box 12217

Capitol Station

Austin, TX 78711

Dear Ms. Ryan and Mr. Robbins:

This staff opinion responds to your requests for guidance on whether the Funeral Rule

permits funeral providers to charge consumers for the cost of collecting insurance or trust

proceeds for the funeral goods and services a consumer purchases. You ask, in particular, about

fees charged: (1) by providers for processing the paperwork needed to collect insurance

assignments or pre-paid arrangements funded by insurance or trust vehicles; and (2) by thirdparty funding companies that advance payments from insurance policies or trusts to funeral

providers before the funding company collects the proceeds, deducts its fees, and remits any

remaining balance to the consumer. 

As you know, the Rule specifies that a funeral provider may charge only one nondeclinable fee, the basic services fee,1

 unless another fee is necessitated by any legal, cemetery

or crematory requirement that is disclosed in writing on the Statement of Funeral Goods and

Services Selected (“SFGSS”).2

 Accordingly, the Rule expressly prohibits funeral providers from

charging:

any fee as a condition to furnishing any funeral goods or funeral services to a

person arranging a funeral, other than the fees for: (1) Services of funeral director

and staff, permitted by § 453.2(b)(4)(iii)(C) [basic services fee]; (2) other funeral

services and funeral goods selected by the purchaser; and (3) other funeral goods

or services required to be purchased [i.e., by legal, cemetery or crematory
Ms. Kathleen K. Ryan and Mr. O. C. Robbins

Page 2 of 2

3

 16 C.F.R. § 453.4(b)(1)(ii). Although the Rule provides an additional exception to the

prohibition “for a combination of goods or services which would be impossible, impractical, or

excessively burdensome to provide,” 16 C.F.R. § 453.4(b)(2)(ii), it can hardly be applicable to

the costs of collecting payment that many funeral providers have undertaken routinely for years

without charge. Collection costs may be recovered in the basic services fee only if this service is

“common to virtually all forms of dispositions.” FTC, Complying with the Funeral Rule (June

2004), p. 10.

4

 Some consumers may choose to avoid any such fee by paying the provider up-front and

later undertaking the work of collecting the insurance or trust proceeds themselves. Others may

decide that they need or prefer to have this service performed on their behalf and agree that the

cost is worthwhile. 

mandates], as explained on the itemized statement [SFGSS] in accordance with

§ 453.3(d)(2).3

 

While the Rule does not permit a second non-declinable fee, it expressly permits fees for

funeral goods and services voluntarily “selected by the purchaser.” It is therefore staff’s opinion

that funeral providers may offer to collect insurance or trust proceeds for a fee that is optional. 

No Rule violation occurs if a purchaser voluntarily chooses such a service and is free to avoid

the cost by declining it.4

 

As a corollary, a purchaser would not be able to make a voluntary choice, as a practical

matter, unless the service and fee are disclosed in advance on the funeral provider’s GPL at the

time of a pre-need or at-need purchase. Toward this end, a funeral provider may list as an

optional charge on its GPL its own collection fees, or the fees for a third party used by the

provider to collect trust or insurance proceeds. If a purchaser voluntarily selects the collection

service, its cost must appear on the SFGSS. This is required by the Rule, and in the case of a

pre-need purchase, assures that the purchaser’s personal representative will know that collection

costs have been prepaid. 

As you know, the views expressed in this letter are those of the FTC staff. They have not

been reviewed, approved, or adopted by the Commission, and they are not binding on the

Commission or any individual Commissioner. However, they do reflect the views of FTC staff

charged with enforcement of the Funeral Rule. Staff Funeral Rule opinions are now routinely

posted on the FTC website at http://business.ftc.gov/content/funeral-rule-opinions.

Sincerely,

/s/

Craig Tregillus

Funeral Rule Coordinator