Deceptive cremation marketer must pay $23 million in proposed California settlement
California’s Attorney General and the District Attorneys of Alameda County, Marin County, and San Francisco have announced a settlement with Texas-based Service Corporation International (SCI), the nation’s largest funeral service provider. SCI does business in California as the Neptune Society and the Trident Society. The settlement, which is subject to court approval, resolves an enforcement action alleging SCI violated California’s Unfair Competition Law and False Advertising Law by engaging in false advertising and unlawful and deceptive marketing of pre-need cremation packages. The proposed settlement, in the form of a stipulation judgment, provides: (a) full restitution to consumers who canceled their plans but did not get a full refund, (b) comprehensive injunctive relief, and (c) $23 million in civil penalties. [Attorney General Bonta announces Service Corporation International, nation’s largest funeral service provider, to pay $23 million penalty and consumer restitution for consumer protection law violations. State of California Department of Justice Office of the Attorney General press release, May 1, 2024]
Pre-need cremation packages enable people to pay for their cremation services while still alive. California law requires that pre-need monies be placed in trust until either the beneficiary dies and services are provided, or the consumer cancels the contract, at which point the consumer is entitled to a full refund. The lawsuit alleges SCI deceptively marketed its products by:
- misleading consumers about its trust management, refund policy, and veterans’ burial benefits and cremation
- routinely informing customers they had 30 days to cancel their plans and receive a full refund, which is deceptive because pre-need customers are entitled to cancel and receive a full refund at any time before services are provided
- misrepresenting its highest-selling pre-need cremation package as its “Standard Plan”
- inducing consumers to sign separate contracts for discounted cremation services and overpriced merchandise
- placing only the cremation funds (less than half) into the trust and refusing to refund the merchandise money when a refund was requested
Under the settlement, SCI and its California locations, Neptune Society and Trident Society, must:
- cease selling the Standard Plan or any similar package unless all money paid for the plan or package, as well as money paid for any collateral agreements, is placed into trust
- provide clear written disclosures informing consumers of their rights under California law—including the fact that consumers are not required to buy additional products or services in order to buy pre-need cremation services
- provide a full refund upon request to any consumer who cancels a pre-need funeral agreement
- comply with California law when advertising events or presentations regarding veterans’ benefits
The Cemetery and Funeral Bureau of the California Department of Consumer Affairs has published a 36-page Consumer Guide to Funeral & Cemetery Purchases.
