Document 7A

15 CATEGORIES OF RIPOFFS, Part A

List of CATEGORIES of commonly-used tactics.

Below this list, in each category, many of the specific tactics will be listed and explained.
1. . The PRINCIPAL ripoff method is EXORBITANT HIGH PRICES and MARKUPS
The method which is the most harmful to families.

2. . Misleading and "using" the media
3. . Influencing and "using" the clergy and churches
4. . Legislative and community influence
5. . False and misleading information to justify the high prices and markups
6. . Misleading information and advertising

Part B (Listed in Document 7B)

7. . Telephone price disclosure tactics
8. . Itemized price list tactics
9. . "Professional" services fee
10. . Mortuary sales tactics
11. . Casket sales tactics
12. . Fraudulent "protective sealer" casket tactics
13. . Pre-pay plan sales tactics and contracts
14. . Cremation sales tactics
15. . Cemetery sales and pre-pay tactics
(See Document 11B-Refunds, Lawsuits -- to obtain a solution to mistreatment in any category above.)

RIPOFF METHODS, Part A:
(Many tactics will be listed and explained under each category title.)




1 . The PRINCIPAL ripoff method is EXORBITANT HIGH PRICES and MARKUPS
-- used by NEARLY EVERY U.S. MORTUARY -- the MOST HARMFUL TACTIC for families:

• Click to see Document 3 -- Caskets, for a chart of low wholesale casket prices, exorbitantly high markups, retail prices and profits.

• See Document 4 -- Mortuary Prices, for a chart showing the great difference in prices charged for the SAME caskets and services by sample mortuaries.)

• Here is a heading from an extensive article in the National Catholic Reporter which indicates how high markups can go. A $250 wholesale casket with a profit of 1300% (14 times wholesale) would sell for $3,500, a profit of $3,250.
  The heading also indicates the industry's need for continued secrecy and misinformation to mislead the media, churches and public -- to enable the ripoffs to continue unabated.

  

• (More tactics and examples will be listed here.)

2 . Misleading and "using" the media:

• Here is a misleading excerpt from a folder, Funeral Prices, published by the National Association of Funeral Directors (NFDA), for its 15,000 member mortuaries to distribute to the media and public. It seems intended to mislead media and families to think of $3,500 to $12,000 as normal (reasonable) for metal caskets -- by listing in the paragraph about "metal" caskets the lowest price as "between $3,500 and $12,500 and more" (for copper caskets not used by most people). .
  No hint is given that steel caskets are the most commonly chosen by families, with dozens of beautiful models available at fair-priced mortuaries for $450 to $900 retail (the same caskets priced up to $3,000 at high-priced firms). These caskets are available to all mortuaries for $250 to $450 wholesale.
  The "$3,500 to $12,500" example will "set up" many people to expect and pay a price in the thousands for a steel casket without complaint -- or any thought of shopping around for one of the dozens of models available for $450 to $900. (Most people and many of the media will be misled by this folder because they don't know about casket pricing, nor whether steel or copper cost more, and would not expect a folder for the public to use a high-priced, seldom-used type of casket as the lowest price listed for a "metal" casket.)

• (Many more items will be listed here.)
  

  
  

3 . Influencing and "using" the clergy and churches:

The clergy are THE GREATEST HELP TO MORTICIANS' RIPOFF of their congregations by cooperating with morticians and not warning their people of the ripoff.

However, the clergy also have THE GREATEST POTENTIAL to STOP THE RIPOFF by

1) WARNING their people about the extortionate markups and deceptive practices, and
2) URGING their people to AVOID HIGH PRICED MORTUARIES, thus forcing the mortuaries to lower their prices to decent levels.
Churches can change their local funeral industry in a short time by these and other methods, especially if they join with neighboring churches and other groups in this effort.

Mortuaries' tactics to influence clergy include:
• giving misleading information to clergy and churches to pass on to their congregations, and encouraging them to recommend the particular mortuary -- leading congregations to believe that the clergy know about the mortuary and approve of its unfair prices and practices;

• giving gifts and bribes to clergy and churches to coax them to:
  • distribute the mortuary's advertising calendars and other materials to their people;
  • not warn their people about unfair prices and practices;
  • not urge their people to avoid particular mortuaries which use unfair prices and deceptive sales tactics;
  • not survey local mortuaries' prices and provide their people with price comparisons;

    
    This editorial cartoon, 6.3" x 11.5", one of the largest seen in a major newspaper, appeared on the front page of a section of the Arizona Republic newspaper, accompanying the group of articles about mortuary/clergy relations which were uncovered. It depicts a mortician secretly handing a kickback or bribe to a clergyman.

• (Many more items will be listed here.)
  
• -

  Comments:

  • Churches should help stop the ripoff:
    A national Catholic newspaper says: "The church could help (stop the ripoff). More dioceses could start low-cost mortuaries (and keep them low-cost). Apart from that, how do the U.S. bishops square the funeral-industry rip-off with their economic pastoral (official statement)? The church has not had much to say about this particular injustice. We wonder why?" (possibly gifts from the industry?) (Editorial, National Catholic Reporter national newspaper, October 30. 1987)
    . . (Note: Although Catholic dioceses and parishes operate many cemeteries, only the Archdiocese of Denver operates a mortuary. The archdiocese began it as a low-cost [fair-priced] mortuary because there were no fair-priced mortuaries in the Denver area. However, it later raised its prices to about the same level as the mid- and high-priced mortuaries of the area.)

  • The funeral industry is continually worried that churches might decide to act against industry abuse. An editorial in Casket and Sunnyside, a funeral industry publication, stated that if one or more of the large denominations ever decided to put funerals under their control or establish their own funeral facilities "the fat would really be in the fire." (The American Way of Death, Jessica Mitford, 1963)

  • Here is a headline from a group of newspaper articles about mortuary/clergy relations and bribery. (Gifts reported have included; free air trips to Las Vegas, memberships at golf courses, financial gifts to pastors of as much as $5,000, cases of scotch, etc.) The diocese said that "only recently has information been available to Catholic clergy regarding costs of mortuary services, the actual wholesale price of coffins and the varying rates in Valley mortuaries." However, the article went on to point out that six months earlier a seminar on the subject had been held for clergy; the previous year the issue had been brought to the priests senate; and three years before a priest sent several letters to all parishes about the issue.

    One pastor provided his parishioners with warnings about the prices, problems with pre-pay plans, mortuaries taking entire insurance policies when the funeral price did not require it, etc. The diocese responded that it was taking a "common sense" approach -- which seemed to mean taking no action to warn people about high prices or try to force prices down to fair levels.

    A Presbyterian minister said that "accepting gratuities is as much a danger to Protestant as Catholic clergy. ... Ministers have been naive about the incredibly high markup in the mortuary industry. Most of the ministers I deal with are coming to feel the costs are staggering, but they are unsure what to do about it. ... I think people have expected more from their ministers, and now they need to give some real guidance." Arizona Republic, July 7, 1984)

  • Media should regularly question national and local denominational officials and and local clergy about why their churches distribute high-priced mortuaries' calendars and other advertising materials, what gifts they accept from morticians, and what steps they are taking, or should be taking, to warn their people about the high prices -- and to join with other churches to stop the fleecing of their people.
    -- On the other hand, morticians may report that some clergy "want a piece of the action", demanding that morticians provide them with gifts or obtain high "clergy donations" from families.

  • (More items will be listed here.)
    

4 . Legislative and community influence:

• pressuring the Federal Trade Commission and congress to keep hands off the funeral industry by preventing meaningful legislation and weakening enforcement (as will be explained);
  
• using state funeral boards, high-paid lobbyists and personal pressure to obtain legislation favorable to profitmaking;
  
• using pressure to keep all state funeral boards composed totally or mostly of morticians so board regulations favor profitmaking and favor morticians and not consumers when there are violations or disputes (only Oregon's board has a majority of consumers; Colorado eliminated its board because of its laxity);
  
• pressuring governors and other officials to appoint to state funeral boards citizen members who are sympathetic or weak and will vote "correctly" in setting regulations favorable to morticians and will be easy on morticians who have violated regulations;
  
• obtaining legislation to facilitate profits and keep out competition by requiring expensive, unneeded items (as: requiring new mortuaries to have "chapels," casket showrooms, embalming rooms and hearses although many firms do not need these or can rent them when needed);
  
• pressuring their state funeral boards to create regulations and misleading "consumer booklets" harmful to families;
  
• pressuring their state funeral boards to harass fair-priced mortuaries to force them to charge higher prices or put them out of business;
  pressuring their state funeral boards restrict trade and aid in keeping prices high by requiring that only licensed "funeral directors" (embalmers) can own mortuaries or can talk to families or deal with them in selecting services and caskets;
  
• having their mortuary schools urge that morticians join boards of churches, groups and agencies to influence them and/or mislead them;
  
• (More items will be listed here)

  
  

5 . False and misleading information to justify the high prices and markups:

Why no "guilty conscience"? Some people ask how morticians can ripoff families without a "guilty conscience."
An industry publication helps morticians to feel good about ripping off families and coaxing families to "sacrifice" money to the mortuary -- explaining that helping families to give more money to the mortuary helps them "atone" for their failings. In fact, apparently the MORE MONEY a mortician helps people to waste and "sacrifice," the more he should feel satisfaction, not guilt.
"It is highly probable that the most satisfactory funeral service for the average family is one in which the cost has necessitated some degree of sacrifice. This permits the survivors to atone for any real or fancied neglect of the deceased prior to his death." (National Funeral Service Journal, August 1961)

• False claims of manhours: A mortician on national TV said that high prices of funerals are due to the great number of manhours required in a funeral. He said that he spends "from 104 to 150 hours with the family" on the average funeral. Other morticians and associations have claimed "99 hours," "two forty-hour weeks (80 hrs.)" of work.
  Other morticians and our IFIC calculations indicate that the average "traditional" funeral requires 15 to 25 manhours of work.
  Here is a copy of a price list of a well-known mortuary which gives the number of hours involved in a "traditional" funeral. It indicates 29 hours total. (The list's total is only 24-26 hours if you subtract hours of items not desired or needed by many families, as family transportation, 2 hrs.; organist, .7 hrs, motorescort if no procession is used, 2.5 hrs.).

• (More items will be added.)

6 . Misleading information and advertising:

• Fraudulent ads designed to scare the elderly. These are samples of ads run weekly in major newspapers for six months by a well-known mortuary. EVERYTHING IN THE ADS IS FALSE. Many elderly who barely survive on Social Security must have been seriously frightened by the fear of losing benefits. After being notified, Social Security lawyers and the newspapers forced the mortician to agree to change the wording of the ads. Instead, he dropped the ads becasue there wasn't much to change. The same mortician and others have used ads offering "Free Plots to Veterans" (wording newspapers required him to drop), and many other deceptive tactics.

  AMAZINGLY, this mortuary was awarded the national "PURSUIT OF EXCELLENCE AWARD" of the NATIONAL FUNERAL DIRECTORS ASSOCIATION, Second Place awards in the during the time of the ads, and the national FIRST PLACE AWARD after running the ads. This seems to indicate the level of integrity of the national organization and its 15,000 member mortuaries.
  

. .
Everything in these ads is FALSE. Social Security Benefits are not diminishing. Congress has not reduced the death benefit. The death benefit will not disappear entirely. There is no plan that can preserve a Social Security death benefit for you if you act immediately! (See Document 11 for more about deceptive sales.)





• (More items will be added.)

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