Funeral industry practices raise consumer concerns

The ACCC is calling for funeral businesses to review their contracts and pricing practices to ensure they comply with consumer and competition laws, in a new report on the funeral services industry.

This is a media release from the Australian Competition & Consumer Commission (ACCC). It was originally published on 2nd December, 2021.

The report, released today, highlights key issues of concern and outlines the critical importance for businesses to treat consumers fairly during the emotionally vulnerable time of planning a funeral.

“The death of a friend or family member can be extremely distressing, and it is important that consumers are receiving clear and correct information when trying to organise a funeral,” ACCC Deputy Chair Delia Rickard said.

“After hearing from consumers about their experiences organising funerals, we are calling on the funeral industry to do a thorough review of their systems, training and marketing practices to ensure they don’t mislead consumers on pricing or other claims.”

The report found some funeral businesses did not disclose all the fees payable and some also claimed to be a locally owned small business when they were not. 

“We are also concerned about funeral businesses using potentially unfair contract terms such as excessive interest rates for overdue accounts,” Ms Rickard said. 

“Many people organising a funeral are unfamiliar with the process and under significant time pressure, and it is important that contracts are fair and reasonable, and businesses do not seek to take advantage of consumers at this time.”

When businesses do not provide goods or services as contractually agreed, or require consumers to make unexpected additional payments, they may be at risk of breaching the Australian Consumer Law.

“The results from an ACCC survey indicated that online comparison websites and staff working in nursing homes and hospitals may be receiving commissions from particular funeral companies in return for positive recommendations or referrals,” Ms Rickard said.

“Consumer laws prohibit businesses from making representations that are incorrect or likely to create a false impression, including where failing to disclose commissions and referral payments is likely to mislead consumers.”

The report also found concerns from consumers that some funeral businesses required or pressured them to buy products or services from other selected businesses, often as part of a ‘bundled’ funeral package which might include flowers or headstones. 

“Funeral packages may raise competition law concerns where funeral directors restrict competing providers’ access to customers and that substantially impacts on competitors’ ability to enter or expand into relevant markets,” Ms Rickard said.

“The ACCC’s enforcement work in the funeral services sector continues and we encourage consumers and funeral industry participants to report any concerns about practices in the sector.”

The ACCC has released guidance to help consumers make informed choices when organising a funeral service. The ACCC has also developed information for the funeral industry to assist in complying with the requirements of consumer and competition laws.

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