Today's Funeral services sector report from the Australian Competition & Consumer Commission states
The death of a friend or family member is a time of considerable distress. For those arranging a funeral, these circumstances can impact their usual decision-making abilities. Funeral providers have an important role in guiding consumers through this process.
Following the ACCC’s recent prioritisation of competition and consumer issues in the funeral services sector we have reviewed reports received from consumers and conducted a survey of consumers and businesses, identifying six key issues of concern: ƒ
- Pricing often lacks transparency and clarity and may mislead consumers, for example where providers do not advise consumers of all the costs associated with their services or label some charges in a way that suggests they are mandatory, when that is not the case.
- ƒ Some standard form consumer contracts contain potentially unfair contract terms, including excessive interest rates or late fees for overdue accounts (an interest rate or fee may be considered excessive if it is not referable to the cost of recovering late payments). ƒ
- Claims about being ‘local’ funeral businesses may mislead consumers (where businesses are in fact subsidiaries of larger corporations). ƒ
- Failing to fulfil prior commitments regarding prepaid funeral products and services harms consumers, who may struggle to enforce their contractual rights and may even be asked to make unexpected additional payments to the funeral business. ƒ
- Non-disclosure of payments in return for third-party endorsements from comparison websites or health service providers can mislead consumers and may have a detrimental impact on the broader competitive process. ƒ
- Bundling or tying that limits consumers’ access to funeral products or services and may restrict competing businesses’ access to customers.
The ACCC has already taken enforcement action in relation to some of these issues, including: ƒ
- In March 2021, WT Howard Funeral Services and Coventry Funeral Homes, trading as Fitzgerald’s Funerals, each paid a penalty of $12,600 after the ACCC issued both businesses with infringement notices for allegedly making a false or misleading representation about their ownership. ƒ
- In September 2021, Alex Gow Funerals paid a penalty of $13,320 after the ACCC issued an infringement notice for an alleged false or misleading representation about the price of its funeral services and the fees that consumers are required to pay. Alex Gow Funerals has also amended its invoices to ensure they accurately describe relevant fees. ƒ
- In November 2021, Bare Funeral Group, trading as Bare Cremation, paid a penalty of $13,320 after the ACCC issued an infringement notice for allegedly making a false or misleading representation on its website about the ‘minimum price’ for cremation only and memorial services, in circumstances where these prices were not available in the majority of geographic regions where the company operated, or for the vast majority of consumers.
The ACCC continues to investigate other funeral businesses and will take additional enforcement action where appropriate.
To avoid contravening the Competition and Consumer Act 2010 (CCA) and the Australian Consumer Law (ACL), the ACCC strongly encourages businesses in the sector to consider these issues and review their: ƒ
- promotional material ƒ internal processes such as staff training manuals and salespersons’ scripts ƒ
- template documents such as quotes, contracts and invoices.
