Detecting consumer fraud: Funeral costs

Investigative Reporters and Editors, Inc. The IRE Journal, May/Jun 2002 by Blyskal, Jeff

Reporting unearths advice from research, hard numbers

Writing an expose about funeral homes is like shooting ducks in a barrel.

The industry has long been the target of some very angry and vocal activists who are ready, willing, and able to feed reporters more horror stories than film ghoul Freddy Krueger can dish out. You want lurid anecdotes? Whistleblowers, weeping victims, or clergy members willing to collar undertakers for bad behavior? Help with a hidden-camera sting on unscrupulous funeral sales practices? The critics will deliver all the trappings of an expose; you hardly have to lift a finger.

But that's not the way Consumer Reports does business. News Editor Kim Kleman and I wanted to give consumers something more useful than yet another shock piece that exploits the understandably high emotion surrounding this grim but necessary consumer service. Our goal was to conduct our own fair, thorough, and independent research and give aging baby boomers valuable shopping advice as they increasingly take on funeral arrangements for the passing previous generation.

Using an exhaustive telephone survey of 235 funeral homes in seven cities and computer-assisted analysis by Consumer Reports' statistics department, we broke some news and gave consumers exclusive new pricing information that will help them get the best deal on almost any type of arrangements they want - from the most basic immediate burial or cremation with no viewing to a top-of-the-line sendoff in bronze, copper or mahogany.

Our report, "Final Arrangements," provided a wealth of new consumer advice on funeral shopping backed by hard numbers. Most significantly, our analysis found that while prepaid funerals are pitched by big nationwide funeral home chains as a way for consumers to lock in low prices now, the chains often charge more than independent mom and pop funeral homes - roughly $1,300 more - for comparable services. Since prepayers get no price discount for their admirable advance planning, that means the savings come-on is a clever ruse to lure consumers into paying top dollar. An estimated nine million to 11 million U.S. consumers have already bought some $21 billion worth of prepaid plans.

New analytical tools

Good funeral cost comparisons in the press are hampered by the fact that consumers have a wide variety of caskets and casket prices to choose from. Most of the funeral homes we surveyed offered six to 12 choices; some offered scores of caskets. Consequently, published cost comparisons tend to provide an a la carte menu of prices and services that require consumers to do their own math. That can result in erroneous comparisons.

Compounding the problem, the casket is a key determinant of the overall cost of any funeral, and significant price gouging and profiteering can be buried in the Russia. We had a call back within the hour. It turns out the FBI and a special Washington State Patrol task force had a full undercover operation already under way. (I do not believe in coincidences: someone tipped federal agents to our work months earlier.)

Now, we had a big problem. The organized crime task force leader asked my producer and me to attend a briefing without a camera crew. Instead of using fear tactics and legal maneuvering, the agent was truly helpful. I remain impressed by his frankness. We obviously had a big story important to our viewers. This agent was supportive of the idea to go ahead and inform the public about the Russian mob's growing power in the Northwest and its ties to the salvaged car industry. However, we had to balance that with the possibility of putting federal agents in a dangerous situation.

In the end, I only made one slight alteration to our series of stories. I kept the name and image of a suspected mob junk car buyer out of the first set of stories. He was not an important element of my piece. On top of that, I was keenly aware that ignoring such an issue would either put an undercover agent in a risky situation or blow months of criminal investigative work.

As it turned out, our attorney hated the idea of putting this character in my series anyway. As is the case with most good mobsters, this moneyman had no criminal convictions for racketeering or anything related to organized crime activities. He remains the focus of a future report.

Public support

At the time of Karin Sumeri's death, her parents quietly called on Washington state lawmakers to strengthen salvaged car notification laws. Their efforts fell on deaf ears. The explosion of public response after our series on the Russian mob changed the mindset in Olympia. Several pieces of legislation are working their way through the legislature. One would require "branding" of most salvaged car titles, while forcing auto auctions to inform the Washington Department of Licensing of sales. This bill had been proposed before, but strong insurance and auto auction lobbies killed it. After our series, both now publicly support the new law. I am under no illusion our investigation will stop the proliferation of the Russian mob in the Seattle area. I do, however, believe we created a much smarter used car consumer.