Submission to NSW Fair Trading on Funeral Information Standard

CPSA's submission to Fair Trading on the draft Fair Trading Regulation 2012.

Download: CPSA's submission to NSW Fair Trading on Funeral Information Standard [Adobe Acrobat PDF - 127.05 KB]

Summary of Recommendations

Recommendation 1

That regulation of funeral goods and services be maintained through Fair Trading Regulation 2012.

Recommendation 2

That under the Funeral Information Standard, all funeral providers be compelled to provide a basic funeral as defined under Division 2, Clause 15.

Recommendation 3

That as funeral goods and services are necessary to the safe and sanitary disposal of bodies, the Independent Pricing and Regulatory Tribunal be given powers to regulate the costs of a basic funeral service, cremation and a basic burial plot.

Recommendation 4

That the proposed addition of subclause (a) under the definition of a basic funeral

– Division 2, Clause 15 – regarding the obtaining of a standard death certificate be maintained.

Recommendation 5

That as a coffin or shroud is a necessary element in the disposal of a body through both burial and cremation, the definition of necessary disbursements under Division 2, Clause 15 be amended to include coffins and shrouds.

Recommendation 6

That the definition of necessary disbursements under Division 2, Clause 15 be amended to include a standard death certificate.

Recommendation 7

That the charging of fees for disbursements be regulated so that providers do not place mark-ups on such goods.

Recommendation 8

That the additional requirements proposed in the draft Fair Trading Regulation 2012 Draft under Division 2, Clause 16: Information to prospective consumers be maintained, save for amendments necessitated by Recommendation 2.

CPSA was founded in 1931 in response to pension cuts. CPSA is a non-profit, non-party-political membership association which serves pensioners of all ages, superannuants and low-income retirees. The aim of CPSA is to improve the standard of living and well-being of its members and constituents. CPSA has approximately 140 Branches and affiliated organisations with a combined membership of over 29,000 people living in all parts of NSW. CPSA welcomes the opportunity to make comment on the draft Fair Trading Regulation 2012. This submission will focus on making recommendations regarding amendments to the Funeral Information Standard (henceforth, Standard).

Fair Trading to maintain oversight

CPSA supports the intentions of NSW Fair Trading to maintain the regulation of funeral goods and services through the Fair Trading Regulation 2012. As discussed in the Regulatory Impact Statement, the funeral information standard was introduced in response to a lack of transparency regarding the costs of funeral goods and services. Funeral arrangements are often not made in advance – particularly where a death is unexpected – and customers have a very limited time in which to arrange a funeral (although, from anecdotal evidence, take-up of prepaid funerals seems to be increasing).

Often people arranging a funeral are doing so at an extremely difficult time and can be vulnerable and emotional. Consequently their decision about a funeral is not necessarily made in a stable state and many customers inadvertently purchase a funeral without a clear understanding of what charges they may face, often leading to costs beyond their capacity to pay. The Standard is necessary to improve transparency and disclosure and, were it to be repealed, customers would be put at a further disadvantage in accessing funeral services.

Recommendation 1

That regulation of funeral goods and services be maintained through Fair Trading Regulation 2012.

Mandating the basic funeral service

Though the necessity of the Standard has become more evident since its introduction, CPSA believes that amendments are necessary to further transparency and increase affordability for customers. CPSA believes that one of the major impediments to this in both the current and draft Standard is the lack of any regulation compelling funeral providers to offer a basic funeral service. In fact, the wording of the Standard actually discourages providers from doing so. A provider, given the opportunity as they currently are, would generally decide not to offer a basic funeral as by doing so they would be required to provide a basic funeral notice ahead of providing information on other goods and services.

CPSA’s research following the introduction of the Standard and the basic funeral[1] highlighted a limited take up of the basic funeral, particularly in rural and regional areas where competition is limited to an even greater degree than it is in metropolitan areas (where Invocare is the dominant provider). Only 12 of the 124 providers contacted by CPSA stated that they offer a basic funeral. It is important to note that this figure may be higher if outlets owned and operated under one brand name were individually counted as offering a basic funeral. Even so, from CPSA’s research, the proportion of different provider brands contacted that offered a basic funeral was less than 10 per cent. Furthermore, many of the itemised quotes for a basic funeral received during the research process reveals a lack of understanding by many undertakers of what constitutes a basic funeral. Undertakers often included add-ons which by law render the funeral no longer a basic funeral, yet their service was still marketed as such. 

While customers are now better placed to access information due to the Standard, telling customers to ‘shop around’ is ineffectual. Apart from the limited time customers may have, if providers do not offer a basic funeral, customers cannot access one. The difficulty of ‘shopping around’ is particularly evident in rural and regional areas where only one provider may service a town or region or where the few providers of the town may act in a cartel-like manner. CPSA therefore believes that it is necessary for the basic funeral to be offered by all funeral providers.

Recommendation 2

That under the Funeral Information Standard, all funeral providers be compelled to provide a basic funeral as defined under Division 2, Clause 15.

Furthermore, funeral goods and services are necessary to the safe and sanitary disposal of bodies. CPSA therefore believes that the basic funeral service, as well as the cost of cremation and a basic burial plot be regulated by the Independent Pricing and Regulatory Tribunal in the same way other essential services in NSW are regulated.

Recommendation 3

That as funeral goods and services are necessary to the safe and sanitary disposal of bodies, the Independent Pricing and Regulatory Tribunal be given powers to regulate the costs of a basic funeral service, cremation and a basic burial plot.

Death certificate to be included in basic funeral

CPSA supports including the obtaining of a death certificate from the Registrar of Births, Deaths and Marriages as part of a basic funeral.

Recommendation 4

That the proposed addition of subclause (a) under the definition of a basic funeral

– Division 2, Clause 15 – regarding the obtaining of a standard death certificate be maintained.

Necessary Disbursements

CPSA believes that greater oversight over the charging of fees for disbursements is required. CPSA’s research found that there was great disparity in charges for items that should generally be fixed costs. The cost of medical and death certificates or permits, for example, tended to differ considerably with quoted amounts for all three certificates and permits ranging from $165.80 in regional NSW to $300 in metropolitan NSW. Variation in medical certificate costs may be due to doctors charging individual fees, however the same cannot be said for the death certificate which is a set price. As these items are necessary to the functioning a funeral they should all be treated as disbursements and should not include any mark-ups.

CPSA believes that as a coffin or shroud is necessary for either a burial or cremation, it too should be included as a disbursement. CPSA found significant differences in the price of the least expensive coffin.  Prices ranged from $700 to $1,390 and $340 to $1,090 in the Sydney Metropolitan Area and regional NSW respectively.

Arguments that this is a sign of competition are invalid when one considers the position of the customer when making funeral arrangements. Customers suffer an information gap about the true cost of a coffin and are unable to make comparisons between the quality and cost of coffins offered by one provider, let alone between a number of providers. Customers are unable to choose a coffin from one provider and other services from another – they purchase a package which mutes any proper comparison between like objects. Funeral providers also place significant pressure on customers who wish to purchase or make their own coffin against doing so, even refusing to provide the service for customers who insist on doing so. Coffin manufacturers are also prevented from selling direct to the customer due to contractual obligations placed on them by providers and customers are also unable to acquire information regarding manufacturers’ prices to gain a more transparent understanding of the cost of a coffin.

Recommendation 5

That as a coffin or shroud is a necessary element in the disposal of a body through both burial and cremation, the definition of necessary disbursements under Division 2, Clause 15 be amended to include coffins and shrouds.

Recommendation 6

That the definition of necessary disbursements under Division 2, Clause 15 be amended to include a standard death certificate.

Recommendation 7

That the charging of fees for disbursements be regulated so that providers do not place mark-ups on such goods. Providers should be compelled to provide receipts/invoices for the cost of disbursements provided.

Information to prospective customers

CPSA supports the additional provision requiring funeral providers to provide information upon request from a customer as proposed under Division 2, Clause 16 of the Standard. Through its research, as well as through information provided by its constituents, CPSA has found that there is often hesitancy from providers to provide information and itemised quotes upon request. Providers seek to have customers come to their offices to further discuss what they could offer or, when providing a quote, refuse to give an itemised quote over the phone or by email. CPSA believes that, if properly regulated, the proposed additional requirement to provide requested information within 48 hours will help allow customers to obtain information in a way and a time that better suits them.

Recommendation 8

That the additional requirements proposed in the draft Fair Trading Regulation 2012 Draft under Division 2, Clause 16: Information to prospective consumers be maintained, save for amendments necessitated by Recommendation 2.