HISTORY OF THE FUNERAL RULE

The roots of the Funeral Rule are found in two books that were published in the late 60’s - - Unsafe At Any Speed by Ralph Nader and The American Way of Death by Jessica Midford. In the late 1960’s, the FTC was a paper tiger. Ralph Nader, who began the consumer protection movement in this country with the publication of Unsafe At Any Speed, was a sharp critic of the Federal Trade Commission for its lack of consumer protection. Specifically, the FTC was criticized because it relied too heavily on consumer complaints and brought enforcement actions only on a case-by-case basis. The consumer protection movement wanted the FTC to proceed against entire industries rather than individual businesses. The …show more content…

Therefore, in 1989, the FTC commenced the first review of the Funeral Rule. Although it was to be completed in 18 months, the review process took close to five years. One of the criticisms of the original rulemaking process was that it was done without survey data. Therefore, in 1981 (three years prior to the Rule taking effect), the FTC commissioned a survey of funeral consumers. That survey, which is known as the 1981 Baseline Study, examined actual consumer experiences in purchasing funeral goods and services. In preparation for the Funeral Rule review, the FTC undertook another consumer survey in 1988. This survey, known as the Replication Study, was very similar to the Baseline Study. The FTC believed that it would be able to measure the impact of the Funeral Rule by comparing the Baseline Study to the Replication Study. Contrary to the FTC’s expectations, the comparison between the Baseline Study and the Replication Study showed that the Funeral Rule did not have the desired impact that the FTC predicted. Consumer shopping among funeral homes actually decreased after the Rule had taken effect. In addition, the evidence showed that consumers were spending more for funerals, not less as the FTC had hoped. While consumers were purchasing about the same level of goods and services, prices had increased over the rate of inflation. Finally, the