Service Corporation International (SCI), the largest funeral service provider in the United States, operating in California as Neptune Society and Trident Society, has reached a settlement with California Attorney General Rob Bonta and several district attorneys. The settlement resolves allegations of false advertising and deceptive practices in the marketing and sale of pre-need cremation packages, violating California’s Unfair Competition Law (UCL) and False Advertising Law (FAL).
SCI’s deceptive practices included misleading consumers about trust fund practices, refund policies, and veterans’ benefits related to cremation services. The company routinely misrepresented the 30-day cancellation period for a full refund, while California law allows consumers to cancel and receive a full refund at any time before services are rendered.
A key aspect of the lawsuit centered on SCI’s “Standard Plan,” a pre-need cremation package deceptively marketed as a single-priced plan encompassing both cremation services and merchandise. However, during the signing process, SCI presented separate contracts for heavily marked-up merchandise and deeply discounted cremation services. This tactic allowed SCI to place only the discounted cremation service funds in trust, retaining the inflated merchandise funds and ultimately withholding over half of the total plan cost from the trust.
This manipulation resulted in consumers receiving less than half of their payment upon requesting a refund, as SCI only returned the portion allocated to cremation services. This practice directly contravened California law, which mandates a full refund of the entire pre-need cremation package price before services are provided. This scheme harmed consumers and artificially inflated SCI’s profits.
The settlement mandates that SCI pay $23 million in civil penalties and provide full restitution to consumers who were denied full refunds. Furthermore, SCI and its California brands, Neptune Society and Trident Society, must adhere to specific injunctive terms, including:
- Discontinuation of Deceptive Packaging: SCI must cease selling the “Standard Plan” or similar packages unless all funds, including those for merchandise and collateral agreements, are placed in trust.
- Transparent Disclosures: Clear written disclosures must inform consumers of their rights under California law, including the right to purchase pre-need cremation services without mandatory additional products.
- Guaranteed Full Refunds: SCI must provide full refunds upon request to any consumer canceling a pre-need funeral agreement.
- Compliance with Veterans’ Benefits Advertising: SCI must adhere to California law when advertising events or presentations concerning veterans’ benefits.
This case underscores the importance of consumer protection in the funeral service industry. Pre-need arrangements offer valuable planning options, but consumers must be aware of their rights and protected from deceptive practices. While pre-planning is beneficial, consumers are not obligated to pre-pay for services. Service providers must be licensed and adhere to state and federal regulations, including providing General Price Lists, itemized statements, and cancellation/refund options.
For comprehensive information on consumer rights related to funeral and cemetery arrangements, consult the Cemetery and Funeral Bureau’s consumer guide: https://www.cfb.ca.gov/consumer/consumer_guide.pdf. The complaint and stipulated judgment are available for review: https://oag.ca.gov/system/files/attachments/press-docs/SCI%20complaint.pdf and https://oag.ca.gov/system/files/attachments/press-docs/Stipulation_Judgment_ExecutionFinal.pdf.
