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

November 27, 2007

Mr. David Nixon, President
Nixon Consulting

P.O. Box 440

Chatham, IL 62629-0440

Dear Mr. Nixon:

You have asked whether the Funeral Rule permits a funeral provider that does not offer
cremations to omit the “direct cremation” description and price disclosure from its General Price
List (“GPL”). You have also asked whether a funeral provider who wants to offer cremation
services, but not “direct cremation” as defined by the Funeral Rule, can omit “direct cremation”
from its GPL.

The answer to your first question is provided by Section 453.2(b)(4)(i) of the Rule, which
requires a price disclosure for “direct cremation,” and each of the other funeral goods or services
required to be listed in the GPL, only “if [they are] offered for sale” by the funeral provider.’ A
funeral provider that does not offer cremation therefore need not include the “direct cremation”
entry that would otherwise be required in its GPL. However, for the reasons which follow, if a
funeral provider offers packages that include cremation, the “direct cremation” entry must appear
in its GPL.

Your second inquiry raises the issue of whether that entry likewise might not be required if
a funeral provider were to rely on the definition of “direct cremation,” in Section 453.1(g) as “a
disposition of human remains by cremation, without formal viewing, visitation, or ceremony with
the body present,”* and offer only cremation packages that include a “formal viewing, visitation or
ceremony with the body present.” However, such literal reliance on the wording of the definition
in isolation from its context would ignore the history and purpose of the Rule, misconstrue the
phrase, “if offered for sale,” and ultimately violate the Rule’s “unbundling” provision.

As the original Statement of Basis and Purpose (“SBP”) for the Rule made clear, the Rule
is designed to prevent “several practices by funeral providers which limit the consumer’s ability to

' 16 CER. § 453.2(b)(4)(ii). See also 16 C.F.R. § 453.2(b)(4)Gi)(C).

2 16 C.E.R. § 453.1(g) (emphasis added).


Mr. David Nixon
Page 2 of 3

make informed, independent choices,” the first and foremost of which was “requir[ing] that
consumers purchase ‘prepackaged’ funerals, which may include goods and services which the
consumers would not otherwise purchase.” Thus, “[t]o ensure that funeral consumers have the
ability to select only the goods and services they want to purchase, the rule generally requires
funeral providers to ‘unbundle’ the goods and services they offer for sale and offer them on an
itemized basis” while allowing providers to “continue to offer ‘package funerals’ for sale as an
alternative to itemized purchasing.”*

Accordingly, when amending the Rule in 1994, the Commission emphasized that “[t]he
Rule’s core purpose is to permit itemization so that consumers may select only the funeral items
they desire, and decline unwanted items.”> The Commission explained that “by ‘bundling’ all
funeral goods and services in a package, funeral providers had effectively forced consumers to
buy unwanted items,” but that the Rule’s itemized price disclosure requirements had alleviated
“the primary industry restraint on consumer choice — package pricing.”

Thus, if a funeral provider offers a funeral package that “bundles” cremation with other
services, such as a “formal viewing, visitation or ceremony with the body present,” it must give
consumers the option of purchasing “direct cremation,” as defined by the Rule, and must include
the itemized price in its GPL for direct cremation required by Section 453.2(b)(4)(ii)(C) of the
Rule. To conclude otherwise — that the offer of a package of goods and services does not include
the offer of an essential element of that package — would contravene the purpose of the Rule.
Thus, whenever “‘direct cremation” is an element of a package offered by a funeral provider, it is
“offered for sale,” and Section 453.2(b)(4)(ii) of the Rule therefore requires that a price disclosure
for this service appear in the provider’s GPL.’

More importantly, a sale of a cremation package that includes more than a “direct
cremation” to a consumer who is not also offered an “unbundled” price for direct cremation
would violate the “unbundling” provision of the Rule. Section 453.4(b)(1)(@) makes it a Rule

3 SB&P, 47 Fed. Reg. 42260 (1982).
‘ 47 Fed. Reg. at 42261.
5 SB&P, 71 Fed. Reg. 1592, 1608 (1994).

6 59 Fed. Reg. at 1602. Section 453.2(b)(6) of the Rule permits funeral providers to
continue to offer funeral packages, 16 C.F.R. § 453.2(b)(6), as the Commission emphasized in
the original SB&P and the SB&P for the 1994 amendments. 47 Fed. Reg. at 42261; 59 Fed. Reg.
at 1594.

7 For this reason, the only circumstance under which a funeral provider would not

be required to include an itemized price for direct cremation in its GPL would be if it simply
does not offer or sell any cremation packages or other cremation goods or services.


Mr. David Nixon
Page 3 of 3

violation to “[c]ondition the furnishing of any funeral good or funeral service to a person
arranging a funeral upon the purchase of any other funeral good or funeral service, except as
required by law or as otherwise permitted by [the Rule].”* To give a consumer no choice but to
purchase a cremation package that includes a formal viewing, visitation, or ceremony with the
body present would condition the furnishing of cremation services on these additional services, in
direct contravention of Section 453.4(b)(1)(i) of the Rule.

Please be advised that 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 upon
the Commission. However, they do reflect the opinions of those staff members charged with
enforcement of the Funeral Rule. Staff Funeral Rule opinions are routinely posted on the FTC
website at http://www.ftc.gov/bcep/conline/edcams/funerals/ staffopinions.shtm.

Sincerely,

(rnp

Funeral Rule Coordinator

8 16 CER. § 453.4(b)(1)(i).