Pre-Paid Funeral Contracts
The Attorney General provides Consumer Alerts to inform the public of unfair, misleading or deceptive business practices, and to provide information and guidance on other issues of concern. Consumer Alerts are not legal advice, legal authority, or a binding legal opinion from the Department of Attorney General.
PRE-PAID FUNERAL CONTRACTS
Many people today choose to plan ahead for funerals and other final arrangements, making informed decisions in advance about burial and cremation and memorials. Many also put aside the funds to pay for these arrangements in a variety of fiscal instruments -- trusts, insurance, and other accounts.
But more and more Michigan consumers, especially the elderly, are receiving direct mail and telemarketing calls from sellers of pre-need funeral goods -- cemetery lots, urns and caskets -- and pressed to pay in advance for goods and services they may not need or use in the future.
Michigan's Pre-Paid Funeral and Cemetery Sales Act permits anyone to sell funeral goods and services on a pre-arranged basis, as long as they register as a seller with the State of Michigan, and receive certification. The providers of these goods and services are not all the same. For instance, funeral directors in Michigan are tested, regulated, and inspected by the state. Pre-need sellers do not have to be similarly licensed.
If you decide you would like to pay in advance for funeral goods and services make sure your money is safe and will be there when the need arises. Laws safeguarding your money may vary based upon the funeral goods or services being sold. Consumers are encouraged by the Attorney General's office to obtain a written explanation of exactly how their money is protected in each transaction, and importantly, whether the pre-need contract is guaranteed, revocable, refundable, transferable, and portable.
The Attorney General's Office, the Federal Trade Commission, AARP, ABC News and Consumers Reports have each done recent investigations into the sale of funeral goods and services. Consumers are entitled to accurate information upon which to base sensible decisions about funerals before, when, or after the need arises. They should not be pressured to pay in advance for merchandise or services they may or may not need. Nor should they be targeted for high-pressure marketing and sales schemes. The Federal Trade Commission's publication "Funerals: A Consumer Guide" details the requirements of federal law and provides a more comprehensive overview. The publication is available from the FTC by calling 1-877-382-4357 or visiting their website at: http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro19.shtm.
Before signing any pre-need contract or paying for anything in advance, consumers should consider the following questions:
- What are you are paying for? Are you buying only merchandise, like a casket and vault, or are you purchasing funeral services as well? Who will eventually provide the services and merchandise you are purchasing?
- What happens to the money you've pre-paid?
- Who are you dealing with? A licensed funeral director? A cemetery sales person? A commissioned pre-need seller? Who owns the firm? How long have they been in business?
- What happens to the interest income on money that is pre-paid and put into a trust account?
- Are you protected if the firm you dealt with goes out of business?
- Can you cancel the contract and get a full refund if you change your mind?
- What happens if you move to a different area or die while away from home? Some prepaid funeral plans can be transferred, but often at an added cost.
- Are these arrangements portable, transferable, and refundable without penalty?
- Have you consulted with your family, and your religious, spiritual, and financial advisors?
- Are you feeling "pressured" or hurried to make these arrangements or buy something before you really need it? If so, by whom?
For more information on pre-paid funeral sellers in the State of Michigan, please visit: http://www.michigan.gov/lara/0,4601,7-154-35299_35414_60647_35468---,00.html
For additional resources on how to shop for funeral services, the FTC has created a website devoted entirely to consumers seeking to protect themselves and their family members faced with having to make funeral arrangements. That website is available at: http://www.ftc.gov/bcp/edu/microsites/funerals/.
If you would like to file a complaint against a pre-paid funeral contract provider who is regulated by the State of Michigan, please visit: http://www.michigan.gov/lara/0,4601,7-154-35299_35414_60647_35468-114483--,00.html, or call (517) 241-9202 to request a complaint form or information.
If you have a general consumer complaint, you may file a complaint with the Attorney General's Consumer Protection Division:
Consumer Protection Division
P.O. Box 30213
Lansing, MI 48909
Toll free: 877-765-8388
www.michigan.gov/ag (online complaint form)