Transcript for: Regulation of Funeral Homes, Cemeteries, & Other Death Services Audio interview by GAO staff with Bill Jenkins, Director, Homeland Security & Justice Related GAO Work: GAO-12-65: DEATH SERVICES: State Regulation of the Death Care Industry Varies and Officials Have Mixed Views on Need for Further Federal Involvement Released: January 2012 [ Background Music ] [ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. It's January 2012. Every family is faced at some point with managing the difficult issues that arise when someone dies. Federal and state governments have a range of regulations covering the death services industry, which includes funeral homes, cemeteries, and crematories. A group led by Bill Jenkins, a director in GAO's Homeland Security and Justice team, recently reviewed federal and state regulation of the death services industry. GAO's Jeremy Cluchey sat down with Bill to learn more. [ Jeremy Cluchey: ] Can you talk about some of the prominent incidents that prompted this report? [ Bill Jenkins: ] Well, the most prominent incident was something that made the national news, which is in an historic African American cemetery in the Chicago area, Burr Oak, where they were disinterring bodies and dumping the caskets and remains in a remote area of the cemetery and reselling the plots. And then there have also been some widely reported problems with pre-need plans, where you've prepaid for your funeral, but then people have tried to exercise that plan and there's not enough money there or the funeral home has gone out of business or things like that. [ Jeremy Cluchey: ] And how is this industry currently regulated? [ Bill Jenkins: ] It's principally regulated by the states. There is a rule by the Federal Trade Commission that's essentially a disclosure rule. The first is that customers must be provided a price list of goods and services and also a price list of caskets before being shown caskets. And secondly, is that the FTC prohibits funeral homes from charging or denying the use of funeral goods, such as caskets purchased from third party sellers, and if they do that that is a violation of the FTC Rule. Beyond that, all the regulation of the industry is by various regulatory bodies in the states. They basically serve five parts of the funeral service and funeral goods industry: the funeral homes, cemeteries, crematories, pre-need services for people who are prepaying for the funeral services that they want, and then third party sellers—it’s not widely known, but for example, not only can you buy caskets over the Internet but you can also buy caskets and funeral goods through Costco and Wal-Mart. [ Jeremy Cluchey: ] What are some of the differences in regulation between different states? Some examples? [ Bill Jenkins: ] Well, it varies by a segment of the industry—almost all states require funeral homes to be licensed and register, and I expect that about 95 percent of the states that responded require that. Also a majority for cemeteries and crematories, although some sectarian cemeteries are not regulated; that is, cemeteries that are run by a Catholic diocese or Jewish synagogues are not regulated at all. Twelve states that we got information from, or about one-third of those who responded to our survey, do regulate third party sellers, and this is much smaller than funeral homes where about 98 percent of states regulate funeral homes. [ Jeremy Cluchey: ] Your team also spoke with state regulators regarding their views about the need for additional regulation. What did you learn from them? [ Bill Jenkins: ] Well, it's like the regulation itself—it's a mixed bag. Some believe that additional federal regulation would be useful because it would make it more standard. They thought that these are the states that for example, see that the FTC rule they think is a good rule and it's the same across the country. But there are other states that say no, because of the differences in states and difference in population and demographics and so forth, the states are a better place to be able to regulate this. [ Jeremy Cluchey: ] Obviously planning and managing the challenging issues around death is something that affects everyone. What's the bottom line for taxpayers who are facing these issues? [ Bill Jenkins: ] Ask lots of questions is the bottom line. Particularly in the area of pre-need plans, that's the area that's most problematic. And you want to ask at least at least four questions if you're considering paying in advance for funeral services for either yourself or a family member. First, is to know exactly what's included and not included. Second, is to know whether or not the price is guaranteed. The third is whether I can cancel this plan or I can transfer it. In other words, if I retire and I move to another state, can I transfer that plan to a funeral home in that state? And in both cases, whether I can cancel it or I can transfer it, it is there a penalty to me or is there a cost to me? And the last thing that is equally important is know how your money is going to be invested. So know exactly what your rights are and where your money will go and how much of that money will be available when you need it. [ Background Music ] [ Narrator: ] To learn more, visit gao.gov and be sure to tune in to the next episode of GAO's Watchdog Report for more from the congressional watchdog, the U.S. Government Accountability Office.