Opinion 13-2

1 16 C.F.R. § 453.2(b)(4)(iv).
2 16 C.F.R. § 453.3(d)(2). Staff is not aware of any such external requirement mandating
that funeral providers charge consumers for collecting insurance or trust proceeds.
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Division of Marketing Practices
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Craig Tregillus 	Direct Dial: (202) 326-2970
ctregillus@ftc.gov 	Facsimile: (202) 326-3395
January 3, 2013
Ms. Kathleen K. Ryan, General Counsel
Pennsylvania Funeral Directors Association
7441 Allentown Blvd.
Harrisburg, PA 17112-9982
Mr. O. C. Robbins, Executive Director
Texas Funeral Service Commission
P. O. Box 12217
Capitol Station
Austin, TX 78711
Dear Ms. Ryan and Mr. Robbins:
This staff opinion responds to your requests for guidance on whether the Funeral Rule
permits funeral providers to charge consumers for the cost of collecting insurance or trust
proceeds for the funeral goods and services a consumer purchases. You ask, in particular, about
fees charged: (1) by providers for processing the paperwork needed to collect insurance
assignments or pre-paid arrangements funded by insurance or trust vehicles; and (2) by third-
party funding companies that advance payments from insurance policies or trusts to funeral
providers before the funding company collects the proceeds, deducts its fees, and remits any
remaining balance to the consumer.
As you know, the Rule specifies that a funeral provider may charge only one non-
declinable fee, the basic services fee,1 unless another fee is necessitated by any legal, cemetery
or crematory requirement that is disclosed in writing on the Statement of Funeral Goods and
Services Selected (“SFGSS”).2 Accordingly, the Rule expressly prohibits funeral providers from
charging:
any fee as a condition to furnishing any funeral goods or funeral services to a
person arranging a funeral, other than the fees for: (1) Services of funeral director
and staff, permitted by § 453.2(b)(4)(iii)(C) [basic services fee]; (2) other funeral
services and funeral goods selected by the purchaser; and (3) other funeral goods
or services required to be purchased [i.e., by legal, cemetery or crematory

Ms. Kathleen K. Ryan and Mr. O. C. Robbins
Page 2 of 2
3 16 C.F.R. § 453.4(b)(1)(ii). Although the Rule provides an additional exception to the
prohibition “for a combination of goods or services which would be impossible, impractical, or
excessively burdensome to provide,” 16 C.F.R. § 453.4(b)(2)(ii), it can hardly be applicable to
the costs of collecting payment that many funeral providers have undertaken routinely for years
without charge. Collection costs may be recovered in the basic services fee only if this service is
“common to virtually all forms of dispositions.” FTC, Complying with the Funeral Rule (June
2004), p. 10.
4 Some consumers may choose to avoid any such fee by paying the provider up-front and
later undertaking the work of collecting the insurance or trust proceeds themselves. Others may
decide that they need or prefer to have this service performed on their behalf and agree that the
cost is worthwhile.
mandates], as explained on the itemized statement [SFGSS] in accordance with
§ 453.3(d)(2).3
While the Rule does not permit a second non-declinable fee, it expressly permits fees for
funeral goods and services voluntarily “selected by the purchaser.” It is therefore staff’s opinion
that funeral providers may offer to collect insurance or trust proceeds for a fee that is optional.
No Rule violation occurs if a purchaser voluntarily chooses such a service and is free to avoid
the cost by declining it.4
As a corollary, a purchaser would not be able to make a voluntary choice, as a practical
matter, unless the service and fee are disclosed in advance on the funeral provider’s GPL at the
time of a pre-need or at-need purchase. Toward this end, a funeral provider may list as an
optional charge on its GPL its own collection fees, or the fees for a third party used by the
provider to collect trust or insurance proceeds. If a purchaser voluntarily selects the collection
service, its cost must appear on the SFGSS. This is required by the Rule, and in the case of a
pre-need purchase, assures that the purchaser’s personal representative will know that collection
costs have been prepaid.
As you know, the views expressed in this letter are those of the FTC staff. They have not
been reviewed, approved, or adopted by the Commission, and they are not binding on the
Commission or any individual Commissioner. However, they do reflect the views of FTC staff
charged with enforcement of the Funeral Rule. Staff Funeral Rule opinions are now routinely
posted on the FTC website at http://business.ftc.gov/content/funeral-rule-opinions.
Sincerely,
/s/
Craig Tregillus
Funeral Rule Coordinator