ROBERT SIEGEL, HOST:
When a family member dies, there are lots of decisions to make, often quickly. There are funerals to plan, burial plots or urns to buy. Many businesses want to help families make those decisions. But an NPR investigation found that some of those businesses steer families toward more expensive choices, sometimes offering the same services at wildly different prices. Here's NPR's Robert Benincasa.
ROBERT BENINCASA, BYLINE: Ellen Bethea's husband, Archie, died just over a year ago after almost 47 years of marriage.
ELLEN BETHEA: It was a Wednesday night. And, you know, we had kind of dozed in and out. And I told my son - I said, you need to get some rest. Let me sit with him.
BENINCASA: Archie had liver disease. After a series of tests and meetings with doctors, it had become clear that, despite his family's best hopes, Archie wouldn't recover. But they signed the papers to remove him from life-support machines. And she sat alone with him in his hospital room.
BETHEA: As soon as everybody else was asleep, and I was sitting there with him, he passed on. And I've heard it said before that - you know, that people that are dying - they kind of wait for the right moment. So I think he kind of waited for me to, you know, be with him.
BENINCASA: Soon after that, the staff at her local Jacksonville, Fla., hospital asked Bethea a question she hadn't prepared for.
BETHEA: When we were finishing saying our last goodbyes there, I was immediately asked which funeral home I wanted to use.
BENINCASA: Bethea gave the hospital the name of the only funeral home she knew in town, Hardage-Giddens. She made an appointment there for the next day.
BETHEA: I went with the rest of my family. My children, my grandchildren were there, too.
BENINCASA: They walked out with a bill of over $7,000. Looking at that bill, one thing might stand out, the cost of Archie's cremation - $3,295. Here's why that matters. Elsewhere in Jacksonville, the company that owns Hardage-Giddens sells the same cremations done in the same place and in the same way for less than half that amount.
In our investigation of pricing and marketing in the funeral industry, NPR spoke with funeral directors, survivors and regulators. And we collected price information from around the country. We found a confusing system that's often impenetrable by grieving customers. Funeral homes often aren't forthcoming about how much things cost, or they embed the information in package deals that drive up costs.
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ERIC TANZBERGER: We're the largest owner of funeral homes and cemeteries in the world.
BENINCASA: That's corporate executive Eric Tanzberger of Hardage-Giddens's parent company, Service Corporation International or SCI. Company officials declined our request for an interview. This is from a presentation Tanzberger gave for investors in 2015.
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TANZBERGER: We own about 1,500 funeral homes and, roughly, about 5 - 400 to 500 cemeteries - all in North America, which is U.S. and Canada.
BENINCASA: The company claims 16 percent of the $19 billion North American death-care market. In Jacksonville, SCI sells cremations under the Hardage-Giddens and Dignity Memorial brands at large, luxurious funeral homes. It also offers cremations for much lower prices at storefront outlets under other brands such as Neptune Society and National Cremation Society. But here's the thing. The company performs all the cremations identically and in the same place, its large crematory at 517 Park Street.
JOSHUA SLOCUM: That, to me, starts to cross a line into consumer deception.
BENINCASA: That's Joshua Slocum, executive director of the watchdog group Funeral Consumers Alliance. He says when companies price the same service differently depending on brand, customers only get the lower price if they know where to find it. And, often, they don't. In Raleigh, N.C., for example, SCI's full-service funeral home and storefront-cremation office are across the street from each other. Crossing that street can save you or cost you $1,895. The logo on your bill might be different, but you'd be paying the same company to do the same job. Here's Slocum again.
SLOCUM: That storefront cremation business and the full-service funeral home - both of them offer what's called direct cremation. They have to by law. Direct cremation is the same no matter where you go. When we're talking about situations where some consumers do not know or can't find out that that same business offers the same service at a lower price - maybe a similar location - that is when I would have a problem with it.
SCOTT GILLIGAN: That's like saying all weddings are the same.
BENINCASA: Scott Gilligan is a lawyer for the National Funeral Directors Association. He says that when consumers choose a funeral home, they're generally not making that decision on price. They're looking at other factors such as reputation and location. But what about identical services that simply have different brand names? I asked Gilligan what he thinks consumers are really getting when they make that choice.
GILLIGAN: Just like if I want a hamburger at a gourmet place, it's the same hamburger I'm going to get at McDonald's. But it's going to cost more...
GILLIGAN: ...Because of the atmosphere, because of what is being done.
BENINCASA: But, Scott...
GILLIGAN: It's choices.
BENINCASA: Scott, I went to Jacksonville. And there's a funeral home that charges 3,200 bucks for a cremation. And there's a storefront that charges 1,600. They're the same company. The cremation's done by the same people in the same place. The body's carried by the same van. So I think your analogy falls apart.
GILLIGAN: Well, that is simply someone offering a service or offering a division which is going to cater to people who are looking for the price. So it's nothing more than GM offering a Chevrolet and a Cadillac. A lot of them...
BENINCASA: The person's getting the same Chevrolet because it's the same cremation. But they're paying - in one case, they're paying a Cadillac price.
GILLIGAN: It's going to depend on - you know, you're going to have to take a look at the actual circumstances of what's going on there.
BENINCASA: One thing that is going on throughout the industry, from the storefronts to the fancy funeral homes, is the bundling of multiple goods and services into packages with sentimental names and higher prices. It happened to Bethea when she visited the funeral home.
BETHEA: Well, actually, I think they only showed us one package that they had.
BENINCASA: That package, known as the Dignity Memorial honor cremation service, included a number of extra charges, including $495 for stationery and $345 for an internet memorial.
BETHEA: It was like, this is what comes in the package.
BENINCASA: Federal regulators have long required funeral homes to offer itemized price lists. But funeral directors are free to emphasize packages in the sales process, as they did with Bethea.
BETHEA: You know, Archie didn't have hardly very much life insurance - maybe 5,000. And I had, you know, a little bit of money in the bank. And it took everything.
BENINCASA: In the sales materials SCI gives customers, the company says buying a package will save them money. But the company tells its investors a different story. At a conference in 2015, the company said that consumers who buy a package, as opposed to services a la carte, pay an extra $1,900 on average. And with consumers paying more, some investors like what they see. Over the last year, SCI's stock is up 30 percent. Robert Benincasa, NPR News.
SIEGEL: Tomorrow on MORNING EDITION, our investigation continues with a look at the Funeral Rule. It's a federal regulation that requires funeral businesses to provide customers with clear price information, but it doesn't always work as intended.
UNIDENTIFIED MAN: It took me, as a longtime lawyer and a professional consumer advocate, literally an eight-hour day just to get a solid list of what funeral services were offered by nearby funeral establishments and how much they cost - eight hours.
SIEGEL: You can hear that report on MORNING EDITION.
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