Transparency needed in funeral biz

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This article was published 13/7/2015 (1930 days ago), so information in it may no longer be current.

Opinion

With the funeral industry's growing focus on upselling bereaved families, we are happy to see the provincial government expects to introduce new legislation this fall to strengthen consumer protection rules around pre-arranged funerals (Province probes pre-arranged funerals, July 9).

That is an important step, but we feel the legislation isn't going far enough to reform the regulations that govern the industry.

One of the biggest problems facing the industry is its perceived lack of transparency. The costs associated with funerals have risen sharply in the last two decades. According to the National Funeral Directors Association in the United States, the median cost of a funeral in 2012 was more than US$7,000, which was an increase of 35 per cent from five years before. Canadians face similar costs.

The price inflation has been caused by many things, but perhaps most importantly by a growing sales culture within the funeral industry. Some funeral homes earn sizable returns on commissions they charge. It pays to upsell families to higher and higher-quality caskets and urns and gravestones. In many cases, those commissions are hidden and undisclosed.

Too often, costs that are quoted up front end up being just a fraction of the final bill. Families get swept up by sales pitches at an emotional time in their lives and can make expensive decisions they may later regret.

Those rising costs have led to a new kind of funeral professional in North America: funeral planners.

For a flat fee, planners co-ordinate funerals and cremations. They may or may not earn any other compensation. Like fee-based financial planners, funeral planners are not typically tied to one group of vendors. They can shop around and plan unique services using any number of venues, caterers and suppliers.

In many cases, planners can save families money because their bottom lines don't improve if you buy more complicated and expensive services.

The province is on the right track in trying to tighten up rules regarding the sales of pre-arranged funerals. In most cases, however, fraud and other illegal or unsavoury business practices are only uncovered after complaints are lodged.

We believe the province should consider some changes in the new legislation. First, rather than being solely complaint-driven, the Funeral Board of Manitoba should be encouraged to actively police the industry by adopting a system of periodic spot audits of funeral homes in the province to ensure they are complying with legislation.

The legislation should also ensure cemeteries are bound by the same rules that cover pre-arranged funerals. Cemeteries are allowed to sell items related to a pre-arranged funeral without the requirement of putting the money in trust. Funeral homes with cemeteries can use this as a loophole in legislation.

The provincial government should encourage more transparency by requiring all funeral homes to divulge all sources of remuneration.

Families should know if their funeral home is earning revenue on the floral arrangements it's ordering. And consumers should have 30 days (instead of the proposed 10) to change their minds and cancel a pre-arranged funeral contract.

Finally, we think the province should require funeral planners to be licensed by the Funeral Board of Manitoba. Anyone can hang out a shingle and offer funeral planning services today. We believe anyone who does should have to follow certain business practices and a code of ethics.

Funerals are very important events in our society.

Because they are important, and because they happen when families are often highly emotional, we need to take steps to ensure we encourage the most ethical practices possible.

 

Shane Neufeld, a former funeral director, is the senior consultant and partner at Integrity Death Care, a Winnipeg-based cremation and funeral planning business.