FTC Staff Comment to the Hon. Ginger Barr Concerning Kansas S.B. 499 and H.B. 2715 to Modify Funeral Laws

Bureau of ComD~tition
FEDERAL TRADE C')MMISSION
WASHINGTON. D.• :. 20580
CO r--i'i ~\JlI ~ ~ i U 	i~
APPRO~JE~D
.,:) ,rt, 	v:' c2 7
February 	14, 	1986
The 	Honorable 	Ginger 	Barr
Kansas 	State 	Representative
51st 	District
Shawnee 	County, 	P.o. 	Box 	58
Auburn, 	Kansas 	66402-0058
Dear 	Representative 	Barr:
The 	Federal 	Trade 	Commission'f 	Bureaus 	of 	Competition,
Consumer 	Protection, 	and 	Economics 	are 	pleased 	to 	respond 	to
your 	invitation 	to 	comment 	on 	Senate 	Bill 	499 	and 	House 	Bill
2715, 	two 	measures 	that 	would 	modify 	existing 	laws 	regulating 	the
funeral 	industry 	in 	Kanscs. 	Both 	are 	currently 	pending 	before
the 	Kansas 	legislature. 	In 	these 	comments, 	we 	discuss 	three
issues: 	(1) 	the 	app].ic~tion of 	diff~re~t r~gulatory standards 	to
ui_:erent 	sellers 	of 	the 	same 	funeral-related 	rnerchandise~ 	(2)
certain 	types 	of 	pre-need 	funeral 	trust 	requirements~ and 	(3)
restrictions 	on 	the 	solicitation 	of 	funerals 	in 	a 	pre-need 	(in
advance 	of 	death) 	context.
The 	Federal 	Trade 	COIT~ission 	("Commission-) 	seeks 	to 	promote
competition 	among 	members 	of 	the 	professions 	to 	the 	maximum
extent 	compatible 	with 	other 	legitimate 	state 	and 	federal
goals. 	For 	several 	years, 	the 	Commission 	has 	b~en 	investigating
the 	effects 	of 	r~strictions on 	the 	business 	practices 	of
professionals, 	including 	optometrists, 	dentists, 	lawyers, 	tuneral
directors, 	physicians, 	and 	others. 	Our 	goal 	is 	to 	identify 	and
~~2k 	the 	removal 	of 	such 	restrictions 	when 	they 	impede
competition, 	increase 	costs, 	and 	harm 	consumers 	without 	providing
countervailing 	benefits.
The 	Commission 	has 	pursued 	this 	goal 	actively 	in 	the 	funeral
industry. 	As 	you 	may 	be 	aware, 	the 	Commission 	on 	Se?ternber 	24,
1982, 	completed 	extensive 	rulemaking 	proceedings 	with 	respect 	to
the 	funeral 	industry 	that 	led 	to 	the 	ado?tion 	of 	the 	Trade
Regulation 	Rule 	Concerning 	Funeral 	Industry 	Practices 	("Funeral
Rule"), 	16 	C.F.R. 	Part 	453, 	which 	became 	effective 	in 	full 	on
1 	These 	comments 	represer.t 	the 	views 	of 	the 	Bureaus 	of
Comoetition, 	Consumer 	Protection, 	and 	Econo~ics of 	the
Fed~ral Trade 	Commission 	and 	do 	not 	necessarily 	re?resent 	the
views 	of 	the 	Commission 	or 	any 	individual 	Co~~issioner. 	The
Co~rnission, however, 	has 	authorized 	the 	Bureaus 	to 	submit
these 	comments.

The 	Honorable 	Ginger 	Barr 	-2-
Apr il 	30, 	1984. 	(A 	copy 	of 	tbe 	Funeral 	Rule 	is 	attached 	to 	this
letter.) 	The 	purpose 	of 	the 	Funeral 	Rule 	is 	to 	promote 	increased
comoetition 	and 	consumer 	choice 	in 	the 	funeral 	industry 	by
facilitating 	informed 	purchasing 	decisions 	by 	consumers. 	Among
cther 	things, 	the 	Funeral 	Rule 	requires 	the 	disclosure 	of
detailed 	information 	about 	prices 	and 	legal 	requirements 	to
purchasers 	of 	funeral 	goods 	and 	services.
As 	we 	understand 	it, 	the 	Kansas 	Cemetery 	Merchandise 	Act 2
("Merchandise 	Act") 	permits 	cemeteries 	to 	sell 	certain 	items 	of
merchandise 	on 	a 	pre-need 	basis 	if 	certain 	trust 	requirements 	are
observed. 	Senate 	Bill 	499 	("S.B. 	499") 	would 	amend 	the
Mercha~dise Act 	to 	remove 	caskets 	from 	the 	items 	that 	cemeteries
can 	sell 	under 	that 	law. 	House 	Bill 	2715 	("H.B. 	2715"),
introduced 	by 	a 	different 	sponsor, 	wOU~d 	a~end Kansas' 	other 	pre-
need 	statute, 	the 	Pre-Need 	Funeral 	Law 	("Pre-Need 	Law"). 	The
Pre-Need 	L?w 	allows 	both 	ce~eteries anJ 	funeral 	homes 	to 	sell
services 	and 	certain 	items 	of 	merchandise, 	including 	caskets, 	if
a 	second 	type 	of 	trust 	requirement 	is 	satisfied. 	H.B. 	2715 	would
amend 	the 	Pre-Need 	Law 	to 	permit 	fun€ral 	homes 	to 	elect 	to 	sell
certain 	merchandise 	under 	either 	the 	Pre-Need 	Law 	or 	the
Merchandise 	Act. 	H.B. 	2715 	would 	thus 	grant 	to 	funeral 	homes 	the
same 	option 	currently 	available 	to 	cemeteries.
House 	Bill 	2715 	would 	also 	amend 	the 	trust 	requirements 	of
the 	Pre-Need 	Law. 	These 	currently 	require 	that 	all 	contract
payments, 	including 	interest 	and 	earnings, 	remain 	in 	tr~st 	until
death. 	As 	we 	understand 	it, 	the 	amendment 	would 	allow 	contract
sellers 	who 	guarantee 	that 	the 	merchandise 	or 	services 	designated
:rl 	the 	contract 	will 	be 	orovided 	at 	death 	for 	a 	fixed 	contract
price 	to 	withdraw 	interest 	and 	earnings 	annually 	from 	the
trust. 	In 	addition, 	H.B. 	2715 	would 	amend 	the 	Pre-Need 	Law 	to
permit 	the 	solicitation 	of 	pre-need 	contrac~s. 	This 	conduct 	is
presently 	restricted 	by 	another 	Kansas 	law.
These 	comments 	discuss 	in 	aeneral 	the 	orovisions 	of 	the 	two
bill~. 	We 	hope 	they 	will 	assist 	you 	in 	evaiuating 	the 	bills'
posslble 	effects 	upon 	competition 	and 	consumers.
2 	Ran. 	Stat. 	Ann. 	§16-320 	et ~.
3 Ran. 	Stat. 	Ann. 	§16-301 	et 	sea.
--4 Kan. 	Stat. 	An!1. 	§16-1722.

The 	Honorable 	Ginger 	Barr
I. 	The 	APplication 	of 	Different 	Regulatory 	Standards
To 	Different 	Sellers 	of 	the 	Same 	Good
-3-
Only 	cemeteries 	may 	sell 	certain 	items 	of 	merchandise,
including 	caskets 	and 	vaults, 	on 	a 	pre-need 	basis 	uncer 	the 	ter~s
of 	the 	existing 	Merchandise 	Act. 	Cemeteries 	selling 	under 	this
Act 	must 	deposit 	110 	percent 	of 	s~ch merchandise's 	wholesale 	cost
(determined 	annually) 	into 	trust. 	To 	the 	extent 	that 	the
contract 	payments 	and 	trust 	earnings 	exceed 	~he 	110 	percent 	cost
requirement, 	the 	seller 	can 	retain 	that 	excess 	to 	pay 	its 	selling
and 	administrative 	expenses 	and 	for 	profit. 	Both 	cemeteries 	and
funeral 	homes 	can 	sell 	services 	and 	certain 	items 	of 	merchandise,
including 	caskets 	and 	vaults, 	under 	the 	different 	limitations
contained 	in 	the 	Pre-Need 	Law. 	The 	Pre-Need 	Law 	mandates 	that
100 	percent 	of 	the 	contract 	pav~ents, 	including 	interest 	and
earnings, 	remain 	in 	trust 	until 	the 	contract 	beneficiary 	dies 	or
cancels 	the 	contract. 	Thus, 	und~r 	the 	statuto:y 	fra~ewcrk now 	in
place, 	cemeteries, 	but 	not 	funeral 	homes, 	have 	the 	option 	of
selling 	certain 	merchandise 	(such 	as 	caskets 	and 	vaults) 	on 	a
pre-need 	basis 	under 	the 	trust 	reauirements 	imposed 	by 	the
Merchandise 	Act 	or 	those 	mandated-by 	the 	Pre-Need 	Law. 	Funeral
homes 	may 	sell 	such 	merchandise 	only 	under 	the 	Pre-Need 	Law.
It 	appears 	that 	H.B. 	2715 	would 	attempt 	to 	address 	this
disparity 	in 	regulatory 	treatment 	by 	permitting 	funeral 	homes 	to
sell 	merchandise 	under 	the 	Merchandise 	Act, 	thus 	allowing 	both
groups 	the 	freedom 	to 	sell 	under 	either 	regulatory 	scheme. 	S.B.
499 	ap?ears 	to 	address 	this 	same 	issue. 	It 	would 	seek 	"parity"
between 	the 	two 	industries 	by 	spec5.fical~y ~xcluding caskets, 	an
item 	sold 	heavily 	by 	both 	cemeteril~s and 	f~ner21 ho~es, 	from 	the
merchandise 	that 	cemeteries 	may 	sell 	under 	the 	Merchandise 	Act.
S.B. 	499 	would 	limit 	both 	groups 	~o 	selling 	caskets 	only 	under
the 	regulatory 	framework 	of 	~he 	Pre-Need 	Law.-
Regardless 	of 	the 	consumer 	protection 	approach 	taken, 	we
recommend 	that 	cemeteries 	and 	funeral 	homes 	be 	subjected 	to 	the
sa~e 	regulatory 	standards 	with 	respect 	to 	sales 	of 	pre-need
merchandise, 	including 	caskets 	and 	vaults. 	We 	are 	not 	aware 	of
any 	evidence 	that 	supports 	subjecting 	cemeteries 	and 	funeral
homes 	to 	different 	regulatory 	standards. 	For 	example, 	we 	know 	of
no 	evidence 	that 	suggests 	that 	there 	may 	be 	a 	higher 	degree 	of
fiscal 	responsibility 	among 	members 	of 	one 	industry 	group 	than
5 Kan. 	Stat. 	Ann. 	§16-32l.

The 	Honorable 	Gin~er Barr 	-4-
the 	other. 6 	We 	are 	also 	unaware 	of 	any 	studies 	indicating 	that
the 	potential 	for 	consumer 	fraud 	and 	other 	abuses 	differs 	between
the 	two 	groups 	with 	respect 	to 	pre-need 	sales. 	To 	the 	extent
that 	a 	pre-need 	seller's 	familiarity 	with 	the 	goods 	it 	sells
might 	be 	a 	factor 	in 	determining 	the 	appropriate 	level 	of
consumer 	protection, 	both 	groups 	appear 	to 	have 	equal 	knowledge
of 	the 	relative 	attributes 	and 	characteristics 	of 	different 	types
of 	caskets 	and 	vaults.
Applying 	differing 	regulatory 	standarcs 	to 	competing 	sellers
of 	the 	same 	goods 	or 	services 	can, 	in 	some 	circumstances, 	have
anticomoetitive 	conseauences. 	When 	different 	regulatory
standards 	impose 	diff~rent costs 	on 	separate 	categories 	of
competing 	sellers, 	one 	group 	may 	suffer 	a 	competitive
disadvantage. 	Depending 	upon 	the 	disparity 	in 	regulatory 	costs,
the 	ultimate 	effec: 	of 	such 	differential 	treat~ent may 	be 	to 	deny
consumers 	the 	benefits 	of 	otherwise 	active 	cc~~etitio~ b~tve2n
the 	affected 	groups, 	such 	as 	lower 	prices 	and 	more 	purchasing
optio~s.
Because 	differing 	regulatory 	treatment 	in 	this 	area 	appears
to 	accord 	no 	significant 	protection 	for 	consumers, 	we 	urge 	the
legislature 	to 	avoid 	the 	anticom~etitive risks 	that 	differential
regulatory 	costs 	might 	pose. 	~
II. 	Effects 	of 	Certain 	Tvoes 	of 	Pre-Need 	Trust
neouirements 	on 	Competition 	and 	Consumers
~urchasers of 	pre-need 	funeraJ 	gooos 	a~d 	~ervices frequently
pay 	for 	the 	items 	they 	have 	select~d well 	in 	zdv~nce of 	death.
Some 	states 	have 	determined 	that 	tlust 	requirements 	are 	an
appropriate 	regulatory 	mechanism 	F?r 	protecting 	the 	pre-need
consumer's 	investment, 	and 	for 	preventing 	fraud 	and 	other
abuses. 	At 	the 	same 	time, 	however, 	certain 	types 	of 	trust
requirements 	-- 	such 	as 	100 	percent 	trust 	requirements 	-- 	may
have 	unintended 	anticompetitive 	consequences 	that 	can 	themselves
injure 	consumers.
One 	hundred 	percent 	trust 	fund 	laws, 	such 	as 	the 	present
Kansas 	Pre-Need 	Funeral 	Law, 	require 	all 	pre-need 	sales 	proceeds,
including 	interest 	and 	earnings, 	to 	remain 	in 	a 	trust 	fund 	until
death. 	Based 	on 	our 	current 	knowledge 	of 	the 	pre-need 	sales
industry, 	it 	appears 	that 	such 	laws 	may 	restrict 	competition 	in
the 	sale 	of 	pre-need 	goods 	and 	servi~es, without 	necessarilv
6 	Differences 	in 	trust 	requirements 	may 	not 	be 	the 	only
differing 	regulatory 	standards 	between 	the 	two 	statutes. 	We
would 	recommend 	that 	any 	other 	differences, 	such 	as
di:ferences 	in 	aUditing 	and 	reporting 	requirements, 	be
eliminated 	along 	with 	differences 	in 	trust 	req~ire~ents.

The 	Honorable 	Ginger 	Barr 	-5-
providing 	countervailing 	consumer 	benefits. 	~nder 	100 	percen~
trust 	fund 	laws, 	the 	contract 	seller 	cannot 	recover 	its 	financial
outlay 	for 	overhead, 	selling, 	and 	administrative 	expenses, 	nor 	a
competitive 	rate 	of 	return, 	until 	a 	distant 	f~ture date, 	when
death 	occurs 	and 	the 	merchandise 	is 	delivered 	or 	the 	services 	are
provided. 	It 	is 	likely 	that 	many 	potential 	sellers 	may 	be
unwilling 	or 	unable 	to 	subsidize 	pre-need 	sales 	for 	a 	lengthy,
indefinite 	period 	of 	time. 	These 	laws 	may 	therefore 	discourage
competitors 	from 	entering 	the 	pre-need 	market. 	Fewer 	sellers 	and
reduced 	competition 	in 	the 	pre-need 	market 	can 	cause 	injury 	to
consumers 	by 	depriving 	them 	of 	the 	lowest 	prices 	for 	the 	goods
and 	services 	they 	wish 	to 	purchase 	and 	of 	the 	full 	array 	of 	pre-
need 	alternatives 	and 	pricing 	options 	that 	would 	otherwise 	be
available.
House 	Bill 	2715 	would 	amend 	the 	100 	percent 	trust
requirement 	of 	the 	Pre-Need 	Law 	to 	authorize 	sellers 	who
guarantee 	to 	provide 	the 	selected 	items 	at 	a 	fixed 	contract 	price
to 	withdraw 	interest 	and 	earnings 	annually 	frc~ 	the 	trust. 	(The
amend~ent would 	require 	that 	funds 	equal 	to 	the 	contract 	price
always 	be 	retained 	in 	the 	trust.) 	Such 	an 	ame;)c;T)l.:nt 	might 	reduce
the 	level 	of 	assurance 	to 	ore-need 	purchasers 	~hat 	adequate 	funds
will 	be 	available 	at 	the 	time 	of 	de~th 	to 	pay 	for 	the 	goods 	and
services 	selected, 	particularly 	when 	inflation 	is 	taken 	into
account. 	At 	the 	same 	time, 	permitting 	sellers 	to 	withdraw
interest 	and 	earnings 	from 	the 	trust 	might 	facilitate 	competition
in 	the 	pre-need 	market 	by 	encouraging 	more 	sel~ers 	to 	offer 	pre-
need 	services.
Leaislators 	may 	wish 	to 	consicer 	alternat:ves 	apart 	frolI
trust 	fGnd 	percentage 	requirements 	that 	do 	not 	pose 	the 	same
anticompetitive 	risks 	and 	that 	may 	provide 	ade~uate protecti~ns
to 	pre-need 	purchasers. 	For 	exa~ple, 	in 	analo~ous types 	of 	sales
where 	delivery 	is 	deferred 	or 	occurs 	over 	an 	extended 	period 	of
time, 	perform~nce bonds 	have 	been 	recognized 	as 	an 	effective
means 	of 	protecti9g 	the 	consumer's 	investment. 	In 	three 	recent
Commission 	cases, 	three 	health 	spa 	businesses 	were 	charged 	with,
among 	other 	things, 	failing 	to 	fulfill 	contrac:s 	with 	customers
and 	retaining 	c~stomersl money 	without 	offerins 	or 	making
refunds. 	The 	consent 	judgments 	in 	those 	cases 	prohibit 	the 	spa
operators 	from 	accepting 	any 	payment 	for 	a 	spa 	membership 	in
advance 	of 	actually 	providing 	promised 	services 	unless
performance 	bonds 	have 	been 	obtained. 	The 	consent 	judoments
specify 	that 	the 	bond 	amount 	must 	be 	for 	at 	least 	$50,600 	or
enough 	to 	provide 	refunds 	to 	all 	health 	spa 	mecjers 	in 	the 	event
7 FTC 	v. 	Lady 	Venus 	Centers, 	Inc., 	No. 	3-84-0158 	(~.D. 	Tenn.
Feb. 	16, 	1984); 	FTC 	v. 	Tyler-Radcliffe 	Co., 	Inc., 	No. 	3-84-
0159 	(M.D. 	Tenn. 	Feb. 	16, 	198~); 	FTC 	v. 	Tho: 	~nter~rises,
Inc., 	No. 	84-2121-?>L~ 	(\-i.D. 	Tenn. 	reb. 	16, 	198~). 	•

The 	Sonora~le Ginger 	Barr 	-6-
that 	a 	spa 	fails 	to 	open 	or 	closes 	down 	before 	all 	the 	services
are 	provided. 	Thus, 	a 	requirement 	that 	all 	pre-need 	sellers
obtain 	performance 	bonds 	to 	guarantee 	the 	delivery 	of 	prepaid
funeral 	goods 	and 	services 	may 	be 	a 	viable 	alternative 	that 	the
legislature 	may 	wish 	to 	consider.
III. 	Restrictions 	on 	Pre-Need 	Solicitation 	of 	Funerals
House 	Bill 	2715 	would 	amend 	the 	Pre-Need 	Law 	to 	authorize
the 	solicitation 	of 	pre-need 	arrangements 	"by 	any 	lawful 	means,
including 	the 	dissemination 	of 	prices 	and 	ejucational
materials." 	Currently, 	angther 	Kansas 	law 	imposes 	a 	flat 	ban 	on
all 	pre-need 	solicitation. 	Although 	it 	is 	not 	clear 	to 	us
whether 	the 	sponsors 	of 	H.B. 	2715 	seek 	to 	make 	all 	or 	only 	select
n:ethods 	of 	pre-need 	solicitation 	lawful, 	we 	believe 	that 	the
[cillowing 	discussion 	will 	provide 	the 	legislature 	with 	a
framework 	in 	which 	to 	consider 	the 	solicitation 	iss~e.
Effective 	communication 	of 	truthful 	commercial 	information
by 	sellers 	to 	potential 	customers 	is 	critical 	to 	the 	functioning
of 	com?etitive 	markets. 	Restrictions 	on 	solicitation 	may
drastically 	reduce 	the 	truthful 	information 	that 	is 	available 	to
consumers 	in 	making 	purchasing 	decisions. 	Such 	restrictions 	on
the 	flow 	of 	information 	mav 	make 	it 	more 	difficult 	for 	consumers
to 	learn 	about 	the 	various·prices, 	levels, 	and 	types 	of 	services
that 	are 	available, 	as 	well 	as 	which 	firms 	are 	stressing 	the
price 	factor. 	When 	consumers 	are 	unable 	to 	compare 	prices 	and
other 	~otions, competitors 	are 	isolated 	from 	competition, 	and
their 	i~centive to-keep 	prices 	dow~ and 	tQ:Q~f~r-alternatives (in
both 	the 	amount 	and 	quality 	of 	seT/ices) 	desl'r~ by 	consumers 	is
reduced. 	Restrictions 	on 	solicitation 	may 	also 	prevent
competitors, 	especially 	new 	marke~ entrants 	or 	those 	offering
innovative 	services, 	from 	obtaining 	clients. 	This 	is 	not 	to 	say
that 	all 	forms 	or 	methods 	of 	solicitation 	are 	alwavs
procompetitive. 	The 	legislature 	may 	determine 	that 	in 	certain
circumstances, 	a 	particular 	form 	or 	method 	of 	uninvited, 	in-
person 	solicitation 	may 	be 	so 	susceptible 	to 	coercion,
harassment, 	or 	similar 	abuses 	that 	its 	prohibition 	is 	justified.
In 	its 	decision 	in 	American 	Medical 	Ass'n 9 , 	the 	Federal
Trade 	Commission 	held 	that 	an 	N/~ code 	of 	ethics 	provision
prohibiting 	virtually 	all 	advertising 	and 	solicitation 	by
physicians 	violated 	Section 	5 	of 	the 	Federal 	Trade 	Commission
Act. 	The 	Commission 	found 	that 	the 	"AMA' s 	broad 	proscr i?tion 	of
8
9
Kan. 	Stat. 	Ann. 	§65-1722.
American 	Medical 	Association, 	94 	F.T.C. 	701 	('079) 	a~f'~	- 	_-', 	1. 	~,
638 	:.2d 	443 	(2d 	Cir. 	1980), 	aff'd 	memo 	tv 	an 	eauallv 	divided
Court, 	455 	U.S. 	676 	(1982).

The 	Honorable 	Ginger 	Barr 	-7-
advertisi~g and 	solicitation 	[had), 	by 	its 	very 	essence,
significa~& adverse 	effec~s on 	competition 	among 	A}~
members." 	The 	Commission 	did 	provide 	in 	its 	order, 	however,
that 	"in 	view 	of 	the 	potential 	overreaching 	that 	may 	occur 	in 	the
'-Ibsence 	of 	?rofessional 	regulation," 	the 	A:1A 	could 	proscr ibe
~uninvited in-person 	solicitation 	of 	actual 	or 	potential
patients, 	who, 	because 	of 	their.Darticular 	circumstances, 	are
vulnerable 	to 	undue 	influence."-~
In 	the 	funeral 	industry, 	restrictions 	on 	at-need 	solici-
tation 	(after 	death 	has 	occurred 	or 	where 	death 	is 	imminent) 	may
be 	justified 	because 	of 	the 	substantial 	risk 	of 	coercio~,
harassment, 	or 	similar 	abuses 	in 	such 	instances. 	Pre-need
solicitation 	and 	the 	competitive 	process 	it 	er.courages, 	on 	the
other 	hand, 	may 	be 	especially 	important 	in 	the 	funeral 	industry
because 	many 	consumers 	:nay 	be 	una\·;are 	of 	the 	wice 	rarCJe 	of 	pre-
need 	options 	available 	from 	pre-need 	sellers. 	Pre-reed
2r:ange~er.ts enable 	consumers 	to 	make 	choices 	withouc 	the 	time 	or
emotional 	pressures 	associated 	with 	at-need 	purchases.
It 	is 	possitle 	that 	the 	legislature 	might 	Jetermine 	that 	in
S0~e 	circumstances, 	even 	pre-need 	solicitation 	might 	be l2susceptible 	of 	coercion, 	harassment, 	or 	similar 	abuses. 	This
does 	not, 	however, 	justify 	restrictions 	on 	pre-need 	solicitation
that 	are 	overly 	broad, 	and 	hence, 	more 	restrictive 	of 	legitimate
forms 	of 	solicitation 	than 	reasonably 	necessary 	to 	prevent 	such
abuses. 	Restricticns 	that 	Drohibit 	all 	Dre-need 	solicitation,
including 	solicitation 	in 	situations 	whe~e there 	is 	little 	or 	no
risk 	of 	coercion, 	harassment, 	or 	similar 	abuses, 	may
~l~necessarily 	restrict 	the 	dissemination 	of 	truthful 	information
abo~t and 	sales 	of 	pre-need 	funerals 	to 	willing 	and 	C08?etent
purchasers. 	Sirr.ilarly, 	restrictions 	that 	permit 	only 	licensed
funeral 	directors 	to 	engage 	in 	pre-need 	solicitation 	may
unnecessarily 	limit 	the 	ability 	of 	legitimate 	businesses 	to
disseminate 	information 	that 	is 	beneficial 	to 	consumers 	and 	for
which 	the 	professional 	expertise 	of 	a 	funeral 	director 	is 	not
re~uired.
10
11
12
Id. 	at 	1005.
1.:5. 	at 	1029-30 	(emphasis 	aeded).
The 	Federal 	Trade 	Commission's 	Trade 	Regulation 	Rule
Concerning 	Cooling-O:f 	Period 	for 	Door-to-Door 	Sales, 	16
C.?R. 	Part 	429, 	is 	a 	consu~er 	protection 	measure 	that
extends 	to 	all 	consumers 	who 	purchase 	pre-need 	funerals 	in
their 	homes. 	The 	Rule 	requires 	that 	the 	seller 	give 	the
consumer 	a 	notice 	of 	the 	consumer's 	right 	to 	rescind 	the
door-to-door 	sale 	within 	three 	days.

< .....
.
The 	Hcnorable 	Gi~ger Bar: 	-8-
Accordingly, 	we 	urge 	the 	legislature 	to 	pc:sue 	whatever
avenues 	it 	deems 	most 	appropriate 	to 	permit 	truthful 	pre-need
solicitation 	of 	funeral 	goods 	and 	services. 	We 	further 	urge 	the
legislature 	to 	tailor 	narrowly 	any 	safeguards 	it 	may 	deem
necessary 	to 	protect 	pre-need 	consumers 	who, 	because 	of 	their
particular 	circumstances, 	are 	vulnerable 	to 	abuses 	that 	have 	been
identified 	by 	the 	legislature.
Conclusion
We 	hope 	that 	our 	co~~ents concerning 	the 	competitive 	and
consume r 	pr otec t i on 	a spec ':s 	0 f 	ce r ta in 	type s 	.of 	pr e -need 	t: us t
requirements, 	restrictions 	on 	solicitation, 	and 	the 	application
of 	differential 	regulatory 	standards 	will 	assist 	you 	in 	your
deli8erations 	on 	5.3. 	499 	and 	H.B. 	2715. 	We 	a?preciate 	the
opportunity 	to 	present 	our 	views.
Sincerely,
y~~
Walter 	~. 	Winslow
Acting 	Director
Bureau 	of 	Competition
;ttac:'ment