No federal law, including the Federal Trade Commission (FTC) funeral rule (see page 4), specifically addresses the sale of pre-use arrangements. The laws and regulations of the states that govern the industry are inconsistent in the states. In addition, many cemeteries, such as religious and community cemeteries, are exempt from state regulations. The Federal Trade Commission`s (FTC) funeral rule states that consumers are entitled to information about the prices of funeral goods and services, whether they request it by phone or in person. Funeral homes are required to give individuals a general price list (LPG) that can be used for comparative purchases. State ex ante regulations Have generally addressed the following issues: 1) licensing requirements for sellers of pre-treated goods and services, 2) trust fund requirements, 3) contractual terms and cancellation requirements, and 4) consumer protection repair funds. These rules differ in scope, approach and requirements. Large chains are buying more and more funeral homes and local cemeteries. Large retail chains now account for about 30% of the country`s funeral business. These large chains actively market and sell pre-application agreements.
Third-party providers More and more third-party providers are selling pre-processed contracts. Third-party sellers are people who have traditionally sold coffins, tombstones, and other funeral and funeral products. While third-party providers are neither funeral homes nor cemeteries, in states that allow third-party sellers to sell pre-purchase contracts, they are subject to the same pre-supply agreement rules that apply to licensed funeral homes and cemeteries. Among states that need confidence for pre-treaty cemetery agreements, funding amounts range from about 30% to 100%. In more than 30 states, 75% or less of the proceeds from the pre-treaty cemetery contract must be held in trust by the seller. In the past, pre-maternity agreements often included only cemetery land and were therefore mainly sold by cemetery builders. Pre-pregnancy agreements are now likely to include a set of funeral and funeral goods and services that can be sold by funeral homes or cemeteries. State laws vary depending on who can sell pre-maternity contracts (funeral home or cemetery representative or third-party seller) and whether a separate pre-first name license or permit is required. If the pre-treaty contract is financed by an insurance product, some states require the seller to be a licensed insurance agent.
Only five state laws state that the state`s Unfair and Deceptive Acts and Practices (UdAP) laws apply to the sale of contracts on demand. Consumer protection funds are set up by states to provide funds to consumers who have been scammed or who have suffered a breach of contract. Currently, eight state laws have a consumer protection fund for funerals and/or funeral arrangements. States that set up collection funds generally require sellers of pre-treaty agreements to pay a fee for each contract sold, with fees based on the value of the contract. The fees paid into the collection fund are used to compensate a pre-claim buyer if a seller who has breached the pre-claim contract does not have sufficient funds to provide a refund Since the rule only applies to persons who provide both funeral property and services, therefore, it does not apply to cemeteries or third-party vendors. In addition, the rule does not apply to trust funds established through the sale of funeral and funeral contracts. In addition, there are no federal minimum standards for pre-birth funeral and funeral contracts, nor is there a federal requirement for full disclosure of pre-birth contractual terms and the risks consumers face when terminating a contract. Similarly, the amount of money washington residents paid in advance for cemetery goods and services during the same period increased significantly. Figure 4 shows that funds for cemetery contracts increased by 158% between 1988 and 1997. Currently, more than $35 million is held in cemetery trust funds in Washington. Regulating the sale of funeral and funeral contracts is more complicated than regulating the sale of many other types of consumer goods. One of the main complications of pre-application agreements is the length of time between the signing of the agreement and the need for the goods and services described in the agreement.
For example, if trust funds are mismanaged after the agreement is signed, these abuses can go unnoticed for years. In addition, it is often difficult to determine whether certain provisions of the contract were performed (e.B type of coffin) because the person who signed the contract died. All states, with the exception of Alabama, have a law that governs the sale of funeral and funeral contracts. Twenty-four states regulate funeral and funeral treaties in a single law, 11 states have separate funeral and funeral treaties, and the remaining 14 states have a single law that covers only funeral treaties. Depending on the scope of state law, the law regulates goods and/or services. Trust Fund Requirements The percentage of individual funeral contract funds that funeral homes must use in trust varies from state to state. Most states require that 90% or more of the proceeds from the sale of funeral contracts be held in trust. Some states do not have such a requirement. Other states have requirements ranging from 40% to 100%.
The funds of the Preneed agreement are held in various locations. Figure 1 shows that of the respondents who paid for the funeral in advance, 30% had trust funds and 30% had funds in life insurance policies. Pre-drug sales in Washington State Although it is known that the number of pre-drug agreements is increasing rapidly, detailed national data is not available. States may collect information on the sale of pre-treaty agreements, but the quantity, type and availability of data vary considerably. Because Washington has collected and studied data that tracks the growth of the industry, the experience of this state provides valuable information about the funeral and funeral industry. Figure 3 shows the dramatic growth in the amount of money Washington residents have invested in pre-processed funeral funds in recent years. This amount increased by 155 per cent between 1988 and 1997 and is currently estimated at more than $70 million. People pay upfront for funerals and funerals by entering into a preventive arrangement or contract to pay in advance for the goods or services they will receive after their death. Typically, this agreement exists between the person and the funeral or cemetery operator and is funded by a funeral trust, pension or insurance policy. At the time of the agreement, a third party – usually a trustee or insurance company – assumes responsibility for managing the funds.
Thus, when signing the agreement, the person often loses access to the funds and can only regain access to the funds by terminating the agreement. .
