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Cotati, CA 94931
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Redwood Funeral Society
To protect and defend individual choice for dignified, ethical, and fairly priced death care, through education, referral, and advocacy.

Serving the California Counties of Lake, Marin, Mendocino, Napa, Solano and Sonoma

The case against pre-purchasing funerals

©1985, 2005 Karen Leonard

Typically, consumers pay for services and goods before death to save money and spare their families additional hardship. They believe that arranging funerals during grief will result in emotional over purchasing. These falsehoods serve as the primary selling tool for the death industry, and the sellers are very aware of the lie.

From the Funeral Monitor (the number 1 trade newsletter): "The bottom line is: Preneed buying does not promise that any significant money will be saved". And from the National Funeral Director's Association: "Our survey found that preneed purchases were typically the same as purchases made at need".

According to AARP's surveys, the average time between prepaid purchase and actual use is fourteen years. When the high interest rate of a typical funeral trust is added into the cost, the consumer has paid more than the current market price for prepaid services and goods. Even if everything goes right, and the seller fulfills the contract as expected, the consumer has already lost in this transaction. And that is preneed selling at its best.

The most common preneed purchases are for cemetery plots. These are usually sold at the time of death to the survivor whose loss prevents them from thinking of a future removed from the body being buried. As years pass, the survivor is usually located far away, often to be with children who become responsible for their end of life care. The cost of transportation of the body back to the site is enormous, and there is no real market for reselling grave plots, and they are never portable. Often cemeteries won't buy them back at the price paid. The buyer's money is lost while the cemetery owner resells the plot again for much more.

Six feet of space in downtown Manhattan is cheaper than a plot in most cemeteries. There are few (if any) property rights. Many who thought they were paying for a burial in the cemetery, have found that their money will only get them to the grave, but not in it. Contracts stating "total cost", "paid in full" and other misnomers implying that customers have paid for a burial are meaningless when families arrive with their dead to discover that additional charges, that may never have even existed at the time of purchase, must now be paid in full before the body can be buried. These charges are often 4-5 times the original price of the plot. Few people will cart away the coffin to make other arrangements. It is graveside robbery and the dead are the hostages.

In California, people selling cemetery space do not have to be licensed or even registered with the state. There are no restrictions from selling in nursing homes, or anywhere there may be vulnerable elderly or the mentally infirm. Commissions are high. (Note: Since this article was first written in the mid-1980's, the Department of Consumer Affairs discovered that over $3 million was missing from preneed funds, resulting in DCA and CFB licensing requirements for cemetery brokers and cemetery salespeople.)

"Constructive Delivery" is a common tool used by death industries to receive monies for goods not delivered at the time of purchase. These goods are supposedly warehoused and available when needed. Contracts never state where these items reside, and often cannot be refunded on cancellation of a policy. When these purchases are for cement vaults, or memorial markers, the cemetery may decide to change their policy and require more "upgraded" and expensive materials. Mortuaries often tie in a cost of a prepaid funeral to the casket, and if survivors choose another model the cost of the funeral is forfeited. These kinds of purchases are fraught with problems. In 1994 one mortuary alone was found guilty of scamming over 12 million dollars from consumers from selling items they never even used.

Mortuary prepaid contracts have similar problems. Although there may be some oversight of funds placed into a trust fund, because it is kept in the state, insurance funds are rarely in the same local. Often trust policies are converted without the understanding or knowledge of the consumer. When this happens, a large percentage (often 40% of the principal) is immediately withdrawn for "commissions". Many mortuaries wanting to raise some capitol have used this tool, telling their buyers that they will get better interest rates. Contracts rarely, if ever, spell out the possibility that if interest accumulates to the point that the contracted services are more costly than the current selling price of the same services, that the family can be refunded the difference. Insurance policies do not spell out what the face value is after commissions, and how much could be lost if death occurs before all payments are made. Couched in highly confusing legal jargon, and often printed to be barely legible, few consumers entering these contracts have full understanding of their risks. Contracts themselves are not regulated at all, and do not spell out services or goods that are missing from completion of an actual burial, funeral, etc… Many advertised prices do not include services and/or goods that would be necessary for a cremation or burial, even though the description may use words to imply that they are.

With the increasing mobility of the population, portability of prepaid death services and goods is also an issue. Even retirees cannot know that they will die in the same area they have retired in. Chain and corporate owned mortuaries usually provide portability only to another mortuary of the same owners. If death occurs far from the locale of one of these types of mortuaries, the survivors either pay for an additional (and often very high) transportation cost or forfeit the contract.

The list is long that outlines all the problems and conflicts with prepaying for death services and goods. It is the number one consumer complaint that finds its way to the California Department of Consumer Affair's Funeral and Cemetery Bureau. And yet, this very department has changed wording in statutes to declare in state mandated "authorizations for cremation" forms that no consumer has any rights to disposition unless they have paid for them in advance. The California Funeral Directors Association principally developed these forms. The Bureau has also caused new statutes for social services to insure that funding for funerals (often used to "spend down estates to qualify for Medi-Cal") are only to be placed in the California Master Trust Fund. This is a fund developed by and for the California Funeral Directors association. The high administration fees of this huge trust go directly to the trade organization.

The DCA Funeral Bureau's actions flies in the face of consumer protection. Essentially, they are advocating for consumer abuse.