April 26, 2002

Today the Subcommittee on Children and Families will explore an issue that I don't think we have ever looked at before. Typically, we have focused on the beginning or early stages of life - on issues ensuring the well-being of children and families, such as education, child care and family leave. Today, we look at issues surrounding the end of life. We will look at how Americans are treated when a family member dies and the family must engage the services of the funeral industry.

I am told that the modern American funeral industry traces many of its origins to the Civil War and the techniques and practices that were developed in response to the large number of battle casualties across the country. In the last century and a half, the industry has obviously changed. In some ways the industry and its practices remain distinctly American, but it has also been influenced by the traditions of many cultures and faiths and the changing needs of our modern society.

What we are here to examine today is whether relatively recent changes in the industry are adversely impacting American families and whether the federal government should take steps to modernize our laws to take account of these changes.

The award-winning television program "Six Feet Under" has popularized the funeral industry and has exposed the public to some of the more interesting contemporary aspects of the business of caring for the dead. Americans are talking about the death care industry around the kitchen table and around the water cooler at work. Unfortunately, all the stories they talk about are not fictional accounts from the tv show. There has been a rash of deeply troubling stories in newspapers across the county. News reports from Noble, Georgia; Hamden and Hartford, Connecticut; Riverside, California; Hilo, Hawaii; and numerous other places around the country have raised serious concerns about the industry.

Americans are now intimately familiar with stories about cremations that never took place and burials that should have happened, but never did. We've read about inspectors who didn't inspect and families who have been told that the ancient tenets of their religious faiths would be respected in caring for a deceased loved one, only to discover that those tenets were ignored.

We've learned that some families, in their moment of greatest grief and vulnerability, have been ripped off by unscrupulous dealers for thousands of dollars. As one of our witnesses will testify, there is a great deal of confusion about funeral products and services and in some cases that confusion has lead to terrible consequences for families.

There are those who say that the newspaper articles and consumer complaints are only anecdotes and do not reflect the high level of fairness, care, and propriety that exists in this industry. I am not here to take gratuitous pot shots at an industry and I understand that it is not the habit of the news media to report on the planes that don't fly.

However, the sheer volume of these reports and the wide geographic distribution of these incidents make it appropriate for Congress to examine whether consumers are receiving the protection that they deserve when they are making one of the largest purchases of their lives under great emotional distress.

I recognize that Congress has never directly legislated in this area. I also recognize that many states and many independent business are doing a good job of protecting the rights and interests of consumers. In light of recent events and changes taking place in the industry, I believe that it is appropriate for Congress to consider whether the federal government can and should take additional steps to protect American consumers and help maintain the high level of consumer confidence that has historically been enjoyed by the funeral industry.

In my view, one of the reasons why we have seen so many recent incidents of concern is that our laws are inadequate. The various sectors of the death care industry are governed mostly by a patchwork of state rules that are neither protecting consumers nor serving the industry well. Currently, the federal role is limited to a single disclosure rule - known as the funeral rule - promulgated decades ago. I believe we must modernize these laws.

I recently asked the General Accounting Office to conduct a comprehensive investigation of the funeral industry to answer questions about pricing, deceptive practices, and adequacy of current consumer protections.

One of the questions that I would like all of the panelists to address here today is this: has the time come for Congress to provide some reasonable statutory framework to protect consumers and restore confidence in this industry?

I intend to keep an open mind, but based on my preliminary assessments, I believe the answer to this question is yes. And I think that Congress should consider taking six specific actions:

1. Codify the funeral rule because the rule should have the full force of law.
2. Expand the funeral rule. Currently the funeral rule only applies to funeral homes. But the funeral industry has changed in the two decades since the rule was first promulgated and the funeral rule should be expanded to cover every business that sells funeral goods or services directly to consumers.
3. The federal government should become an effective partner with the states to promote more frequent and thorough inspections of funeral facilities. I believe Congress should consider establishing a grant program to assist states to hire and train more inspectors. As a condition of receiving federal funds under this program, I believe states should be required to adopt clear standards and license requirements for funeral service providers.
4. We need to provide consumers with helpful information. I believe the FTC should be required to maintain a clearinghouse of price information to help consumers make informed decisions.
5. We need to consider whether consumer protections from other areas of federal law should be adapted to this industry. For example, in the area of mortgages, we have established a clear bright line prohibition against excessively high interest rates and we have outlawed prepayment penalties. We've also allowed consumers a right of recision. Perhaps there are analogous contract provisions that we should consider here.
6. Finally, we should give the FTC enhanced enforcement authority so the Commission can more effectively crack down on bad businesses. These enhanced enforcement authorities would include the power to levy special penalties, issues immediate cease and desist orders and in extreme cases to temporarily or permanently close facilities that pose a danger to the public health or well-being.

I want to thank all of the witnesses for their willingness to share their thoughts with us here today. With that, I would like to turn to recognize my colleague Senator Max Cleland.

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