Contents

Chapter 18
Recommendations for reform

Mandatory disclosure of component prices

18.68Our second proposal is for a new set of requirements designed to ensure consumers have sufficient information to negotiate effectively with funeral service providers. We note that both Victoria and New South Wales have enacted legislation requiring disclosure of funeral price information to consumers. The New South Wales regulations describes three occasions in which a consumer must be provided with a written breakdown of the cost of goods and services, including necessary and likely disbursements. Those occasions are:377

The regulations envisage a limited level of information to be given for basic funerals, thereby keeping the compliance costs for basic funerals as low as possible.

18.69The Victorian legislation requires that funeral directors provide a price list of the funeral goods and services it offers to any person who asks for it.378 The price list must itemise prices and include service fees and a description of maximum prices. Consumers must also be provided with a written itemised statement of costs before entering into an agreement. That statement of costs must include a description of how the consumer may make a complaint.

18.70Our recommendations will cover three separate areas of disclosure and are broadly based on the Australian reforms. The first is directed at the department that is administering the new statute. The second two relate directly to the providers of funeral services and will involve direct disclosure to consumers.

Publicly accessible general consumer information

18.71The department administering the new statute (we recommended earlier that this is the Department of Internal Affairs) should develop and maintain a website providing consumer information to assist consumers making decisions after a death, particularly decisions about purchasing funeral services.

18.72In its role as the department responsible for the office of Births, Deaths and Marriages, the Department of Internal Affairs has already produced a pamphlet entitled “Before Burial or Cremation”. That pamphlet sets out the legal obligations, processes and documentation required before and after a body is buried or cremated in New Zealand or transported to another country. It also deals with situations where the coroner is involved and provides a checklist of documents for registration of the death.

18.73We consider that information published by the Department of Internal Affairs should be extended to other types of consumer information designed to ensure that consumers understand their options in relation to funerals, burial and cremation. Significant advances in the level of public understanding of funeral decisions could be made by providing publicly accessible general information about consumer options and rights in dealing with funeral directors. The consumer information published by the administering department should include detail about:

18.74We believe this proposal would help to address some of the public misunderstanding about the funeral sector caused by the current lack of publicly available information. This, in turn, is likely to empower consumers in their dealings with funeral directors. They could ask better questions about the elements of the service. They will be able to negotiate more effectively on certain aspects of the service, such as reduced prices for reduced services, and be able to make comparisons between service providers including whether a provider is connected to an industry body. It may also enable bereaved families to more effectively reflect their own cultural, ethnic or religious customs after death.

Recommendation

R96 The department administering the new statute should develop and maintain a website providing consumer information to assist consumers making decisions after a death, particularly decisions about purchasing funeral services.

Published price list Top

18.75The new statute should require funeral service providers to publish a clear price list of all the funeral goods and services they provide, either on a website or in a written form to be provided to any person who asks for it. The list must:

18.76In relation to funeral goods, the list must provide either a description of the full range of a particular good (for example, the range of coffins or caskets available from that service provider) or a description of the price range of the goods on offer. If the funeral service provider offers packages of goods and services, the price list must itemise the goods and services provided in each package and the total cost of the package.

18.77This recommendation addresses the difficulties consumers face in obtaining information to compare the services and prices offered by different funeral service providers. We consider that it will not only enable consumers to make such comparisons, it will also give them information to negotiate for only certain elements of a service rather than an entire package.

18.78This requirement should apply to any person who carries on the business of providing funeral services, including any person who coordinates or arranges funeral services where the actual goods or services are provided by someone else. Funeral consultants or arrangers are common in other countries but, as yet, not so common in New Zealand. They do not provide services directly themselves but coordinate the services of others. Under this proposal, such consultants or arrangers would need to disclose the component pricing of those providers they primarily contract with together with a disclosure of the consultant or arranger’s own fee or mark-up on the contracted services.

Recommendation

R97 The statute should require that funeral service providers must publish and make available a price list of all the funeral goods and services it provides, including:
  • a description and total price of funeral goods and services offered;
  • a list of any service fees charged by the funeral service provider;
  • the maximum price that a funeral service provider charges for funeral goods and services; and
  • any particular items required by regulations made under the new statute.

Statement of costsTop

18.79The statute should also require that, before entering into an agreement for the supply of funeral goods or services, a funeral service provider must give the consumer a statement setting out an itemised list of the cost of the goods and services to be supplied. Regulations should establish a basic list of the items that must be itemised when they apply. That list should at least include the cost of:

18.80In addition, any other costs that can be itemised and ascertained at the time of providing the statement of costs should be itemised. Those costs must correspond to the costs on the funeral goods and services price list. If the item to be supplied is a funeral package, the statement of costs must itemise each good or service provided in the package. If the funeral service provider does not know the cost of any disbursement at the time of providing the statement of costs, the funeral service provider must provide a reasonable estimation of the cost and a statement of the actual disbursement cost with the final invoice.

18.81Finally, the statement of costs must also describe how the consumer may make a complaint about the provision of the funeral goods or services. As we described above, we found that this is not well understood currently. If the funeral service provider is affiliated to an industry body with a complaints process, the funeral service provider may describe that process. If it is not so affiliated, it must describe an alternative, such as the Disputes Tribunal.

18.82These disclosure requirements will provide consumers of funeral services with more and clearer information than many receive currently. It will provide the necessary element of reassurance to consumers at a time when they are particularly vulnerable. It will also provide the information necessary to enable them to make informed decisions and to negotiate for only certain elements of a service, rather than an entire package, if they wish.

Offence of breaching disclosure requirementsTop

18.83We consider that breaching the disclosure requirements recommended here should be an offence. We analyse the maximum penalties for this and each of the offences proposed in this Report in Appendix B.

Recommendations

R98 The statute should require that, prior to entering an agreement for the supply of funeral goods or services, the funeral service provider must give the consumer a statement of the costs of the funeral. A breach of this requirement should be an offence.

R99 That statement of costs must set out:
  • the cost of each of the goods and services to be supplied;
  • the cost of any disbursements;
  • the cost of any service fees;
  • if the goods and services to be supplied is a package, the description of each item in the package and a total cost of the package; and
  • how the consumer may make a complaint.
R100 Each item on the statement of costs (except disbursements) must correspond with an item on the published price list.

R101 If the funeral service provider does not know the cost of any disbursements at the time of providing the statement of costs, the funeral service provider must provide a reasonable estimation of the cost and a statement of the actual disbursement cost with the final invoice.
 
R102 A service fee may only cover services for which the cost is not able to be ascertained at the time of providing the statement of costs.

R103 The statute should provide that a breach of these requirements is an offence.

377Fair Trading Regulation 2012 (NSW), reg 19.
378 Funerals Act 2006 (Vic), s 21.