The Mourning After: Funeral Home Rip-Offs (cont.)

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Langley found a similar price discrepancy when he chose a casket: They ranged in price from $1,000 to $10,000. He chose one that he felt was “the most beautiful eternal resting place,” which was a $3,500 oak box that had a cross on top. Ultimately, Langley was satisfied enough with J.F. Floyd Mortuary to preplan his own funeral with the mortuary.

CONFUSING OPTIONS. California is the only state that requires funeral homes to post their products and services online. Consumer advocates hope that this will change.

CONFUSING OPTIONS. California is the only state that requires funeral homes to post their products and services online. Consumer advocates hope that this will change.

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In 2010, FTC’s spot check of funeral homes found that 28 percent violated the Funeral Rule by failing to disclose prices properly and misleading buyers about federal and state law.

“Most consumers believe incorrectly that they’re required to buy services, such as embalming or certain types of caskets,” Slocum tells us. “Almost nothing is required at death except the body be buried, cremated or donated to science within a few days—and get a death certificate. If someone is telling you anything else is required, make them back that up, because it’s usually misinformation.”

We believe that funeral-cost transparency is necessary, because funeral services are among the highest priced services that most people will incur, and they’re incurred at a time of great stress.

The median cost of an adult funeral with burial and viewing was $7,181 in 2014, according to National Funeral Directors Association (NFDA). We found that the total cost of services at two funeral homes in the same region typically varies greatly. In Washington, D.C., for example, a full-service funeral, which includes burial, embalming, viewing and a graveside ceremony, costs $3,770–$13,800.

“We’re very concerned that consumers don’t know that the range of charges for the same services in their town is much greater than they’re aware,” Slocum says.

Considering the high costs of burials and the accompanying services, it isn’t surprising that more consumers now choose less expensive cremations. Cremations outnumbered burials 49 percent to 45 percent in 2015, according to NFDA. NFDA predicts that by 2030, the cremation rate will reach 71 percent.

The average cost of a cremation and related services also is rising at a rate that’s similar to the average cost of a burial and related services. Trade magazine American Funeral Director reports that the average price of cremation with service at a funeral home (before the crematory fee, which can add from $200 to $1,000) was $3,691 in 2015, compared with $3,141 in 2011. This price doesn’t include an urn.

Experts tell us that cremation prices typically vary as much as do those of funeral services that include burials. In our research, we found companies that offer direct cremations (no ceremony or casket) for as little as $490. In Washington, D.C., the price of a direct cremation ranges from $1,295 to $7,595 for essentially the same product, CFA says. Why does it vary so much? We found that businesses that solely offer cremations (and are unaffiliated with funeral homes) simply charge much less for a cremation than does a funeral home, presumably because they have a smaller overhead.

Experts tell us that cremation costs will continue to rise while funeral homes try to offset the revenue that’s lost from fewer burials. David Nixon, who is a consultant for the funeral industry, says cremations bring in only “half the revenue of that of a burial.” Lloyd Swint of Olinger Hampden Mortuary says funeral directors also try to make up for lost revenue by offering cremation packages that include services that are similar to (and beyond) those that you’d expect from a traditional funeral that includes a burial. (More on those services later.)

“You’ve got to raise your price, because you’ve got to cover your cost,” Swint tells Consumers Digest. “What are you doing for that price that’s going to be something that families want to take advantage of, that’s going to add respect to their loved one?”

Amid the steady rise in cremations, the funeral industry saw a revenue decline in 2015. Nixon predicts that funeral homes will have to consolidate or shut their doors because of lost revenue. Dan Isard, who is the president of Foresight, which is a business-management and consulting company for the funeral industry, agrees.

“You might find that two funeral homes have to merge their businesses, so both of those owners can make a living,” Isard says. “Maybe they only have one building.”

In other words, you’ll continue to see fewer funeral homes. The number of reported U.S. funeral homes was 19,390 in 2015, compared with 20,557 in 2009, according to National Directory of Morticians. Nixon expects that the number of funeral homes will shrink by another 25 percent by 2025. Less competition almost certainly will lead to higher prices, Nixon says.

Nixon says we should look to Canada, which has a cremation rate of 69 percent, for clues about the future of funeral services in the United States.

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