Funeral services

Funeral products and services are covered by consumer law

When a family member or friend passes away, it can be an emotional and stressful time. It can be difficult to make buying decisions for the funeral while grieving.

Products and services sold to consumers for cremation and burials are covered by the Australian Consumer Law.

Businesses selling these products and services must not:

• mislead consumers
• offer contracts with unfair terms
• take advantage of the vulnerability experienced by people arranging a funeral.

There are also specific state and territory laws covering:

• licensing or registration
• codes of conduct
• specific pricing disclosure
• burial and cremation requirements.

State and territory government bodies enforce these laws.

Contracts must be fair

The law protects consumers from unfair terms in contracts.

In contracts for funeral services, contract terms may be unfair if they:

• require consumers to make full payment in advance where this limits the consumer’s ability to recover costs if parts of the contract are not carried out
• require consumers to pay excessive interest or excessive fees for late payments
• allow the business to add charges for extra services without telling the consumer or getting their permission
• allow the business to not provide the services, or change the date, at its sole discretion and for any reason.

Terms that a court finds to be unfair are cancelled and can’t be enforced.

See Contracts for more information about unfair contract terms.

Businesses must provide clear and accurate information

It is against the law for businesses to mislead consumers.

Prices must be clear and accurate

Businesses should be clear and accurate about their prices when communicating with consumers. Businesses may break the law if they mislead consumers. Examples include:

• widely advertising prices that are only available to a small number of consumers
• presenting optional costs as mandatory
• mislabelling late payment fees as ‘estate fees’.

Consumers should be given clear information about what is and isn’t legally required to provide a funeral service. Businesses should also give consumers the contract terms and cost of services.

Pricing information and quotes should:

• be itemised
• include all associated fees and charges
• clearly state the final price, including GST.

Pricing information in a business's promotional materials, processes and templates should:

• state all applicable fees and charges upfront
• identify the geographic areas where any promotion applies.

This information should be clear, accurate and upfront, and not be hidden using fine print or disclaimers.

Claims about business ownership must be truthful

Businesses must not mislead consumers about their ownership. For example, businesses such as subsidiaries of larger corporations must not incorrectly claim to be ‘family owned’, ‘local’ or ‘independent’.

Commissions should be transparent

Some businesses pay commissions for customer referrals from third parties. This might be hospitals, nursing homes and comparison websites.

To avoid misleading consumers, businesses should be transparent about these commercial relationships.

Businesses must not take advantage of vulnerability

Consumers should not feel pressured into buying a product or service that isn’t right for them.

Businesses must not engage in unconscionable conduct. This can include acting harshly or taking advantage of the vulnerability experienced by consumers arranging a funeral.

For example, businesses must not:

• pressure vulnerable consumers to buy more expensive products or services, or products or services they don’t need
• charge more than what was agreed.

Funeral businesses need to remain aware of the distress that consumers can be experiencing when arranging a funeral. Businesses should tailor their dealings appropriately. For example, businesses should be cautious about setting sales targets for their staff. This can encourage upselling and pressure sales.

Businesses must honour pre-paid funeral contracts

Many funeral providers allow consumers to pre-purchase services and products, such as:

• funerals
• cremations
• burial plots
• memorials or cremation niches

These may not be needed for many years.

Contracts that run over such long time periods can create compliance risks for businesses. Businesses should have systems to document, check and honour pre-purchase contracts. When a consumer provides evidence of a pre-purchase contract, the business must honour it. The business must not require the consumer to make unexpected extra payments.

Further information for consumers on pre-purchasing funerals is on the Australian Securities and Investments Commission’s (ASIC) Moneysmart website

‘Bundling’ or ‘tying’ should not limit consumer access

Some funeral businesses:

• offer ‘bundled’ packages such as offering a lower price if many products or services are bought together
• require consumers to buy other products such as headstones or coffins from particular providers. This sales technique is known as ‘tying’.

Businesses should be aware that ‘bundling’ and ‘tying’ is of particular concern to the ACCC when it:

• restricts competitors from entering or expanding into relevant markets
• stops consumers from getting a lower price for products or services from a third party provider.

See also

Contracts

False or misleading claims

Unfair business practices

Bare Cremation pays penalty for allegedly misleading consumers on pricing (media release)