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FTC Sells Out Consumers AGAIN!

21 Apr

Heard enough? Convinced? Apparently these statements were not convincing enough for the FTC. But these are but a fraction of the comments from across the country opposing the proposed merger. While they are a response to the outcry raised by a powerful minority in the Washington D.C. area, they represent the concerns, I believe, of many ethnic minorities, including African Americans, Asian Americans, Latinos and Hispanics, many of whom will be disadvantaged by the lack of choice in affordable funeral services. In fact, the American Antitrust Association, in a letter opposing the SCI-Stewart merger, reads: “In its consent order in SCI-Alderwoods, the FTC recognized the existence of ethnic and religious submarkets for funeral and burial services. It stated that “[b]ecause of the preferences of ‘customs conscious’ customers in some local markets, the alleged product market is limited to facilities that provide the customs and rituals for a specific population.” The consent order identified three communities that were likely to be affected adversely by SCI’s acquisition of Alderwoods: African  Americans, Chinese Americans, and Jewish Americans. “SCI’s proposed acquisition of Stewart affects a market in which purchases are made under emotional distress and in which abusive practices toward consumers have been widespread. This acquisition would combine the two leading providers of funerals-and-burials nationally and could compound these anti-consumer realities. The transaction’s anticompetitive effects may be felt most acutely among ethnic and religious groups that have fewer funeral-and-burial options than the general  population.” [emphasis provided] I couldn’t agree more!

Despite such objections the FTC approved the merger

Despite such objections the FTC approved the merger with the mere condition that SCI sell off some of its holdings to Guess who? another large corporate funeral group. Go figure. Furthermore, SCI’s offer to sell some holdings so that the merger will go through is published in a so-called “Public Version” with substantial parts blacked out, because “Respondents [= SCI and Stewart Enterprises] request that the non-public, confidential version of this petition and its attachments and the information contained herein be accorded confidential treatment.” The US government, the FTC complied. So the American public may never know the details of the merger.

The FTC assumes a new name: Forever Two-timing Consumers

All the FTC Rubber-stamp Approvals Corps can Buy!

To no one’s surprise, the Federal Trade Commission approved the merger of the two largest funeral home and cemetery chains, Service Corporation International (SCI, also known as “Dignity Memorial®”) and Stewart Enterprises. While the feds are requiring SCI to sell of 91 locations (53 funeral homes and 38 cemeteries) in various parts of the country, the consolidation of the two biggest funeral chains under the banner of SCI is not good news for consumers. SCI has long been one of the biggest sources of consumer complaints—deceptive sales pitches, violating consumer protection rules on the right to choose funeral goods and services, and more (“SCI Buys Stewart Enterprises”)  But what we do know is that when the merger happened SCI went from 1,437 funeral homes to 1,653, and from 374 cemeteries to 515. In other words, despite selling off a couple of locations, SCI increased its operating locations from 1,811 to 2,168 just through this merger. This does not include SCI’s acquisition of smaller operations within individual states; such acquisitions would not involve the FTC. Thanks a lot for covering our back, FTC! FTC assumes a new name: Forever Two-timing Consumers (two-timing  =  cheating). (See How a Funeral Giant Overcame Antitrust Concerns and Gobbled Up Its Rival (Bloomberg) )

So what are the funeral home chains and corporate funeral service groups doing to the local family-owned operation? Here’s what an 8th generation funeral home owner has to say:

The Funeral Chain’s and Funeral Service Corporations’ Message to the Family-values Independent Funeral Homes

But John Bachman, 56, the eighth-generation operator of Bachman Funeral Home in Strasburg, Pa., says has been experiencing price competition from corporate consolidators for years. “They can buy in bulk and keep salaries low,” he notes.

In the past, says Bachman, whose business was founded in 1769, his family could avoid the expense of advertising. “Word of mouth has been very effective for us,” he says. “But now, we have a lot of people shopping for price.” Today’s price-sensitive clients, for example, are opting for inexpensive veneer caskets to save on funeral costs, he notes. “I haven’t sold a cherry casket in three years.”

Societal factors, such as increased mobility, have had an effect as well, Bachman says. “People are not loyal to a particular funeral home just because it’s in their town.” And many municipalities have more funeral homes than can be sustained, given the death rate of their populations, Bachman observes.

Bachman, who once ran three funeral homes, now operates only one. “There isn’t a lot of money in this business if you’re small,” he says.

(Source: Will Industry Consolidation Affect Family Funeral Homes?)

Other concerns are raised in areas like Tampa Bay (Merger gives funeral corporation SCI a big piece of the Tampa Bay market) where funeral chains and funeral service corporations are devouring markets in whole regions, and are showing a distressing unresponsiveness to consumer desires and the needs of the bereaved.

In a letter to the FTC, the American Antitrust Institute put their concerns this way: “As a district court has recognized in a merger case, a lack of competition may be reflected, not necessarily in higher prices, but in supplier unresponsiveness to consumer desires. Unless there is “competition to spur it to make changes … the combined SCI-Stewart entity may engage in abusive sales practices and provide poor service at little cost to its [read, the corporation’s] bottom-line. Preserving competition is critical to ensure that consumers do not face an increase in price and further reduction in quality of service for funeral and cemetery services.” (citing United States v. Franklin Electric Co., 130 F. Supp. 2d 1025, 1034-35 (W.D. Wis. 2000)) ]emphasis provided]

While I am not claiming that mergers like the SCI-Stewart merger has actually increased abusive practices or have resulted in poor service or a reduction in the quality of service for funeral and cemetery services, I do want to point out quite a number of lawsuits and big-dollar settlements that have been made by SCI for abusive practices and poor service. SCI recently received some very serious criticism for desecration of graves among other abuses in the article, “Huge Funeral Chain Settles Graveyard Desecration Suit, Buries Financial Details” (Bloomberg). But, funeral chains and funeral corporations are definitely reducing choices and quality of the funeral goods and services they are  providing. This raises a number of concerns that are voiced in hundreds of articles complaining about Newcomer Funeral Service Group, SCI, Dignity Memorial, StoneMor, and others.

On the one hand we have those who choose to treat their dead like some much hazardous waste, a mere inconvenience that has to be disposed of and so they do just that. For about $1,000, sometimes less, they choose direct cremation or direct burial of the deceased. No frills, no ceremony, no meaning or memory. Just burn them or bury them. Done. But on the other hand we have those very human beings who want to afford at least some dignity and respect to their dead loved ones, and it’s these decent folks who get the royal screwing at the hands of the funeral chains and funeral service corporations.

A Disgraceful Example:
The Archdiocese of Philadelphia Sold its Rights to 13 Dioscesan Cemeteries to StoneMor for $53 million! They Sold Your Consecrated Ground!

The Church Can’t Be Trusted–Sold out again!

These nationwide Walmart-type funeral chains and corporate funeral service groups don’t focus only on funeral homes and funeral good and services, and as in the case of SCI, they’ve been buying up cemeteries as well. SCI owns about 200 cemeteries across the country but StoneMor, another corporation specializing in ghoulish exploitation of mourners and their dead, has teamed up with financially strapped communities and even the Roman Catholic Church! One really sickening example is in Philadelphia, where the Roman Catholic Archdiocese has sold out to StoneMor, another death industry giant, by selling its management rights in diocesan cemeteries to StoneMore for a reported $53 million!

In a 2015 Consumer Alert entitled “StoneMor Cashing in On Catholic Cemeteries”, the author writes that, “After purchasing the management rights to 13 Catholic cemeteries, with an initial payment of $53 million for a 60-year contract, StoneMor is intent on commercializing the sacred grounds of remembrance for faithful Catholics, while disguised behind the robes of the church.”  If you don’t think that’s the supreme desecration and deception, here’s what Ray Smith, V.P. Marketing, StoneMor had to say: “We actually felt that for marketing it was better to have the church still perceived [as the owner].” If that’s not enough to turn your stomach, Smith goes on to say: [T]hese cemeteries have for the most part never sold the merchandise or the other services. And there is – we don’t know exactly, but somewhere between 60,000, 70,000, 80,000 living members of the Catholic community in Philadelphia that own their interment rights but they don’t own their vault, they don’t own their marker, they don’t own their casket and they don’t own the opening and closing. So there is going to be the enormous opportunity for the company to market just to their own lot owners…”. It’s clear that the company’s sales force uses cemetery records to contact families and subject them to high-pressure sales tactics that maximize company profits. In some cases, families are confronted about purchasing funeral merchandise for other family members, while they are making arrangements for the burial of a loved one. The story adds skewed incentives, deception, greed, and unethical behavior by a management team that engaged in precisely such behavior with a prior company, The Loewen Group, which ultimately filed for bankruptcy. Better keep an eye on your funeral insurance funds!

Our advice to the local independent funeral service provider: You probably have been serving your local families for generations. Don’t sell out. Protect yourselves and organize. Let your voices be heard loudly and clearly.

Our advice to consumers: First of all, make pre-arrangements now, when you have the time and presence of mind to make wise decisions and not be scammed! More importantly, before making the unwise decision of handing over your pre-arrangements to a funeral home chain or to a funeral service corporation, you’d better ask some very sticky questions about how your investment in your funeral future is secured. Don’t just get hooked by the expensive television and media ads or the great “Lower Prices” come-on only to be in the unavoidable situation of getting nickel-and-dimed straight to the poorhouse! Talk Ask around and get references from family, friends, and neighbors who have dealt with local funeral homes, sometimes for generations. Then talk to a trusted local independent funeral home. You’ll still have to ask how your money is secured but at least you’ll have a go-to when you need one most. And make sure the local funeral home is not a funeral chain or funeral corporation masquerading as your family funeral home!

Huffington Post asks: “Would you rest the soul of a loved one with a product purchased from Walmart?” (Walmart Caskets For Sale Online, Starting At $999). Well, would you?

The survival of our traditions depends on us. It’s our duty to communicate and todefend our cherished culture and values. Our humanity depends on it!

Our Traditions and Rituals are Important to the Living and the Dead. It’s our culture and values that are at stake!

 

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