The beat goes on. A funeral director in Oakland MD has been accused of swindling consumers out of $170,000. Once again the consumers pre paid for pre need goods and services to be delivered upon death. Once again, a seemingly nice and upright funeral director has absconded with the funds.

This is a never ending theme. Please never for any reason pre pay for any funeral goods and services. You may get lucky and not have a problem. On the other hand you may be a member of the statistical few who lose everything. It is not worth the risk.

A recent article in the “Funeral Service Insider” was advocating funeral directors get more involved in their local hospice organizations. The authors were determined to make the association as one of let us help our hospice friends to the benefit of all. How absurd. The only reason they have is to engrain themselves into the minds of the hospice personnel so they will receive more business. They want to stop by and assist those who are under hospice care so they understand their end of life options. The agenda for the funeral home is to do everything possible to encourage all involved to use their services.

The article tries to cover up the real intent by claiming that it is building relationships. Well it is no different the the funeral director belong to civic organizations. These too are to build relationships. But the relationships are primarily to enhance their sales. People like to do business with people they know and like. So building relationships is a part of the job for any sales oriented entity. But inserting oneself into a hospice environment crosses the line. What if every funeral director in an area were popping into the hospice every week or so and offering their assistance. Who then would consumers turn to, the last one in the door.

Consumers need to be aware that the funeral director at the hospice door has as his main objective to get their business. Being a nice guy will potentially lead consumers to make decisions that are only in the best interest of the industry. It will also cause a potential, if not real, conflict of interest with hospice employees. Funeral industry personnel aligning with hospice personnel is not good for consumers. BEWARE.

This time it is a cemetery that is unable to pay for pre need goods and services sold to consumers. Apparently letters were sent to about 1,300 customers of  Westlawn Memorial Gardens Cemetery advising consumers that their pre paid purchases will not be honored.  Michael Graham, who died in 2007, was the owner of the property was originally charged with embezzling funds from the trust.

Quite frankly,  I am surprised that there have not been more cases of cemeteries defaulting on their pre need contracts. Cemeteries were in the pre need business long before funeral homes. They began selling pre need cemetery lots in the 1940’s. Of course the land was there and I do not know of any instance that consumers were denied access to their lot.

In the 50’s cemeteries began selling pre need memorials and vaults and trusting some of the funds to provide for future delivery. At the time there was a tremendous backlash from others in the industry eventually leading to trusting laws and to protectionism. Some state legislators were convinced by the funeral lobby to limit sales of vaults and caskets to funeral directors. Eventually these self serving tidbits were overturned. Never the less the cemetery industry has seen a very small number of fraudulent  incidents as compared to the funeral industry.

So far, there has never been a 100 million dollar event as there have been at least two for funeral pre need plans. Unfortunately there are hundreds of millions of dollars of consumers money in trust funds overseen by cemetery companies. So just like the incident in Topeka, it is only a matter of time before greed or need will cause a larger incident.

There was an article in last weeks Post-Bulletin from Rochester, MN about the state trying to make a decision about how to handle payment to funeral homes for indigents. The state is discussing the possibility of cremating these folks instead of the current practice of burial.

It is a simple economic problem. Either pay 2-3 thousand dollars to bury these unfortunate individuals or pay less then one thousand dollars to do cremate them and scatter the ashes. There are mixed sentiments coming from the industry. Many believe that the indigents deserve the same consideration and dignity that comes with a full funeral service. This is absurd. some also make the argument that some family may show up at some future time and be dismayed at the industry for doing something that they did not want. Well, I suppose that could happen in rare cases, but where have these friends and family been while the deceased was becoming indigent. Once again an argument that does not hold water.

The article even quoted one funeral director stating that cremation costs were nearly $1,800. If that is so everyone in Minnesota should leave immediately. Immediate cremation should never cost more then $1,000. There is no need to do many of the things the some funeral directors deem to be essential.

The Minnesota legislature should pass a law that pays for the cremation of any and all indigents. They should add to the law that the funeral industry will be held harmless from potential litigators claiming that they acted without the permission of family members. Of course, the home will need to perform some minimal diligence to assure that this person is in fact without benefactors. Common sense will hopefully lead Minnesota legislators to a reasonable conclusion. Industry lobbyists will attempt to make sure that common sense does not prevail.

It is bad enough that the Texas pre need firms National PreArranged Services, Lincoln Memorial Life and Memorial Service Life are in receivership. But now there is a new scam for consumers to avoid. According to an article in the StarTelegram, there is an e-mail campaign in Texas that “seeks personal banking information to help with claims processing.” This e-mail is sent by a “Donna Garrett”. 

This representation is a fraud and consumers should not be taken in by this purported help offer. The scammers are ready and waiting for the unsuspecting and gullible. This only adds to the heartbreak and financial loss incurred by those who were duped by the industry.  Hopefully no one else will be hurt.

Illinois funeral problems keep getting worse. First the debacle with the trust funds that lost somewhere between 50 to 100 million dollars of assets. This continues with state funeral directors suing their own board and possibly Merrill Lynch for mishandling the funds. Now some of these funeral directors are challenging the State’s comptrollers office for information on how they may have not properly handled their oversight. And now they have the state funding for indigent persons not having the funding the directors believe they need.

All in all the funeral directors in Illinois are having a bad year. I do take issue with their inability to make money on the modest $1,100 they receive for these services. The indigent people who need to use the state funding are not entitled to have the services they may want. After all they are not paying for the services, the State is. Apparently funeral directors want to embalm these indigents, put them in a container (casket), and bury them in a cemetery. All of these are costly but unnecessary. All they need do is pick up the body and take it directly to a crematory. There need not be a cleaning and embalming. There need not be a casket. Then the ashes should be scattered.

If direct cremation were used, instead of the current process, the funeral director would make several hundred dollars from each poor person they handled. They are bemoaning the lack of funding from the State while they should be finding alternative, profitable means of dealing with the problem. Until they change their thinking, paying consumers will ultimately pay for the losses incurred by the lack of funding for indigents. This is on top of the other financial problems currently hovering over the entire Illinois funeral establishment.

The New York State Funeral Directors Association recently enacted a “Code of Ethics” for it’s members. This can be found on their website at www.nysfda.org. While I applaud their efforts, their code is woefully inadequate.

First off their code applies only to those in their state who choose to belong to the group. So it seems that anyone else can do whatever they want totally outside of what the industry insiders suggest. Now of course there are state and federal regulations that  these non joiners must still abide but if that is so why does the nysfda need to have there own code.

Second, the code is just a general review of what any reasonable, responsible person would do in any business. There is nothing new or noteworthy. All businesses need to operate in a legal and ethical manner. All businesses need to treat their customers in a professional and ethical manner. So it begs the question. Why does the nysfda feel a need to create a document that is already the standard for any business? Do they in some way feel that there are members of their group are not really abiding by the standards of good business practices? Who knows.

The “Code of Ethics” does give the appearance that the Association is doing something for consumers. But what they are really doing is creating PR piece that will give consumers the false impression that they are actually doing something for consumers. Other then PR this is a meaningless document. 

Reading the complaint procedure is a bit like reading the tax code. It is complicated and one must always remember that is is the foxes that are judging the foxes. Unless there is a substantial PR problem, like the guy cutting off limbs to fit the casket, there will be little to no action taken by a group of insiders. Once again news is made for the industry with little or no concern for the public. They sure can look good and brag about their accomplishments while really doing nothing.

Here we go again. An Ohio funeral director, J. Jeffrey Fretti, recently died and his estate attorney reported that there are pre need funds missing to the tune of $180,000. Unfortunately this is a trend that seems to be continuing through out the United States. At least once a month we discover another incident of pre need funds missing in some form or other.

Sometimes it is massive as in Illinois and Missouri and Texas. Then there are the small ones like Mr. Fretti. Once again innocent families who were wise enough to pre plan will lose their money and their confidence in the industry. Unfortunately consumers have no way of knowing who the honest people are. Bernie Madoff was able to continue his ponzi scheme for years because he had the confidence of the people he was duping. The funeral industry is full of honest people, and yet there are a few who are not so honest. There is no way to know who is who. And circumstances and opportunity may put someone in a position to do things they would not normally consider. So the bottom line for consumers is to not trust any one in the industry. 

I still advocate that everyone should pre plan their funeral. I am also convinced that pre paying in any way is a very risky venture for consumers. The big shoe to drop will be if or when one of the public companies is discovered to either have mishandled funds or that there are not enough funds to provide for pre paid services. Hopefully that will never happen.

Their was a recent article from Allendale, SC about Cave Funeral Services where the funeral home admitted to cutting off a man’s legs so the body would fit into a normal length casket. Apparently the deceased was 6’7” and would not fit into the casket. Of course the family sued and settled and the State revoked their funeral license.

What is the least noticed item about this event is that it is commonplace in the industry to do whatever it takes to make a deceased presentable for visitation periods. Even though it is certainly our of the ordinary to remove limbs, it is not out of the ordinary to break bones and otherwise mutilate a body just so it will look presentable. 

Part of the embalming process ritually mutilates the body. A hole is drilled into the abdomen and a trocar is inserted. The sole purpose is to remove all of the moisture from the internal organs. Essentially all of these organs are sucked out of the body as just one of the normal parts of the embalming process. Eyelids are glued shut and mouths are stapled together all for the presentation of the body. Yet, these are not called mutilation. An attempt is made to replace all blood with a concoction of preservatives for the sole reason of making the body presentable. 

So even though cutting off legs is on the extreme end of body mutilation, it still happens with every instance of embalming.

The Illinois Funeral Directors Association has been ordered by the Comptroller of the State of Illinois to repay the underfunded pre need fund in Illinois some ten million dollars. This figure is the approximate amount the the IFDA took in fees for management of the trust. The IFDA has been sued by several people and firms in the state to repay the 59 million dollar deficit. 

On Your Funeral Guy’s blog, he brings up the potential that the IFDA may go bankrupt. This would be fortunate for the board of the association and the members of the association. How can these people be trusted. They have clearly mismanaged hundreds of millions of dollars and then took 10 million dollars to do so. Not only that but the IFDA bought insurance policies on members of their own board for some unknown reason. They apparently enticed members of the association to participate in their fraud by buying personal insurance on the member if they placed their money in the state trust.

Someone, somewhere in the IFDA board had to come up with this scheme. So who was responsible? It is not likely that any one person will confess so the entire board will have to assume responsibility. So the IFDA going bankrupt is a good idea. The funeral directors in the state should encourage such action. They need to wipe away any and all ties to this corrupt organization and start again. 

Every state funeral board is typically made of a majority of funeral directors and sometimes a consumer advocate, typically hand chosen by the board to mimic their desires. These association have one job. Protect the interests of the funeral directors in their state. They have little interest in protecting consumers, and as far as I have seen never do so. Oh yes, they will rant and rave about the consumer protection laws and directives initiated by the association. But the bottom line is that they do only what is in the best interest of the funeral industry. Often they will even introduce legislation as some kind of consumer protection, when in reality it is only to protect their interest. There are laws in the country that regulate the sale of caskets and vaults that were sold to legislatures as consumer protection yet only gave funeral homes the exclusive right to sell these products. There are also laws that regulate the sale of pre need goods and services that limit who can sell these products and how the money is to be managed. Yet did the consumers benefit from these? Of course not. All funeral associations are solely for the benefit of the industry. CAVEAT EMPTOR.