Major Settlement! Funeral Giant Pays $23 Million Over Fraudulent Marketing
The nation’s largest funeral corporation has agreed to pay $23 million to settle claims that it engaged in fraudulent marketing tactics in California for its prepaid cremation services. Attorney General Rob Bonta announced Wednesday that Service Corporation International denied wrongdoing but agreed to discontinue deceptive activities and pay restitution to victims in order to resolve a civil case filed by the state and three counties.
Prepaid services allow individuals to pay for their cremation while still alive. The money will be held in trust, with a full return possible at any time before usage.
SCI, established in Texas and known in California as the Neptune Society and the Trident Society, was accused of breaking the state’s unfair competition and deceptive advertising laws by misrepresenting its prepaid cremation services in a variety of ways, according to a news release.
“When consumers purchase preneed funeral services, they expect — and the law requires — their funds to be safe and protected until those services are utilized,” he went on to say. The penalty includes $5.75 million each for the state of California and the counties of Marin, San Francisco, and Alameda, whose district attorneys participated in the civil suit.
Alameda County District Attorney Pamela Price stated that the settlement would compel the firm to follow the law and provide relief to victims.
“Neptune Society’s and Trident Society’s pervasive price manipulation and deceptive marketing affected all their consumer negotiations and contracts for preneed services, demonstrating how their unlawful business practices were a result of decisions made at the highest levels of the companies,” Price said in a statement.
SCI has faced numerous lawsuits and sanctions in various states and at the federal level, including those alleging deceptive advertising. The corporation did not respond to a request for comment.
The company was accused of defrauding customers by employing various strategies, such as posting a disclaimer advertising its prepaid services as refundable for up to 30 days, despite the fact that state law does not require a time restriction on refunds.
The company also combined goods and cremation services into a single “Standard Plan” although only a portion of payments were placed in trust.
According to the attorney general’s office, the firm attempted to shortchange customers who later demanded refunds by stating the purchase included non-refundable products.
The corporation committed not to sell its Standard Plan unless the entire sum was placed in trust. It also committed to giving clients written notice of their rights under state law, including the right not to pay for additional items or services when purchasing preneed cremation services.
SCI would also provide full reparation to anyone who did not receive a complete refund after seeking it.
San Francisco District Attorney Brooke Jenkins stated that the settlement should dissuade other organizations from employing similar techniques and that the preneed cremation industry has long been a source of customer complaints, many of whom are elderly.
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