Board cites 2nd funeral home
By John Joyce
Published in News on May 27, 2013 1:46 PM
Sanctions handed down by Raleigh against funeral homes in Wayne County have left residents wondering how to go about safely and smartly securing arrangements for the final needs of their loved ones.
For the second time in as many weeks, the N.C. Board of Funeral Service has issued a consent order finding a Goldsboro funeral home in violation of state requirements.
E.M. Matthews Funeral Home was forced to shut down after its owner and funeral director Eric Matthews was charged with several counts of embezzlement and the board revoked his licenses.
The board has now revoked the pre-needs license held by Rhodes Funeral Home, located at 708 S. Slocumb St., as a result of bookkeeping violations discovered during a three-month investigation that began in November 2012.
Investigators found Rhodes failed to retain copies of annual reports and to update its journals annually. The company also neglected to maintain sufficient records regarding its bank deposits, receipts and statements, according to the board.
In addition to losing its pre-need license, the business has been placed on a one-year probation during which any infraction discovered by the board could result in the revocation of its operating license.
As it stands, Rhodes Funeral Home may continue to provide funeral services, but is barred from selling pre-need service contracts.
North Carolina law, General Statute 90-210, defines a pre-need funeral contract as one that "applies the trust funds or insurance proceeds to the purchase price of funeral services and merchandise at the time of death of the contract beneficiary without protection against potential future price increases."
But there are two types of pre-need contracts -- inflation-proof and standard.
Both contracts lock in the money invested, meaning that a person with a $10,000 pre-need agreement of either kind will have exactly that amount of money available at the time the services are to be provided.
The difference is that an inflation-proof contract also locks in the cost of the services and products. With a standard contract, those prices can rise and fall with economy.
Even when conducted properly, to an uninformed consumer, navigating the business of funeral services can be tricky.
There are numerous laws and license requirements that govern funeral services, and pre-need funeral service contracts can cost consumers thousands of dollars.
Violations of those strict standards can result in the businesses being shut down and land the proprietors in jail.
The responsibility to be licensed falls on the funeral home and funeral directors, but it is the right of the consumer to ask to see the service provider's permits and licenses.
"Every funeral home has to be licensed as an establishment, and every funeral director has to be licensed. Both licenses are required to be posted somewhere on the wall inside the establishment," said Peter Burke, director of the N.C. Board of Funeral Service, which oversees funeral operations in the state.
If the funeral home has multiple locations, each location must display its licenses and permits.
Also, if a funeral home is going to do pre-planning, the establishment and the seller must have licenses.
These credentials are issued as what Burke referred to as "pocket permits" and will not be mounted on the wall. The permits are actually carrying cards similar to an ID card. The seller is required to produce them upon request.
Licenses issued by the state board expire annually on Dec. 31. Consumers should not only look for the licenses, but check to ensure they are current, Burke said.
Operating without a current and valid license can result in penalties such as fines, suspensions of other licenses or permits held and criminal prosecution. Inspections are conducted every three years and funeral homes are audited annually.
Funeral homes that are licensed to sell pre-need contracts have to follow very strict rules about depositing accepted payments into the proper accounts (within five days of receiving the money) and filing the contracts (within 10 days).
Complaints and suspected abuses of the system are investigated vigorously and by various state departments including the board and the Department of Insurance.
"The board will investigate and can take disciplinary actions. In some cases, the board will pursue criminal charges through the district attorney's office," Burke said.
SIDEBAR:
So what do consumers need to know about pre-need contracts?
North Carolina General Statute 90-210 defines a pre-need funeral contract as one that "applies the trust funds or insurance proceeds to the purchase price of funeral services and merchandise at the time of death of the contract beneficiary without protection against potential future price increases."
Bottom line: Pay now for services that will be used later -- and maybe, or maybe not, be protected from price spikes for materials and services.
There are two types of pre-need contracts -- inflation-proof and standard.
Both contracts lock in the money invested, meaning that a person with a $10,000 pre-need agreement of either kind will have exactly that amount of money available at the time the services are to be provided.
The difference is that an inflation-proof contract also locks in the cost of the services and products contracted the moment the contract is signed. With a standard contract, those prices can rise and fall with economy.
"When a customer goes in looking for a pre-need contract, they need to be sure they are aware of which kind they are getting. They need to specify standard or inflation-proof," said Stephen Howell, funeral director at Howell Funeral Home in Goldsboro, a licensed pre-need provider.
To further protect consumers, the N.C. Board of Funeral Service in Raleigh will issue a letter acknowledging the contract within 30 days. If the consumer does not receive that acknowledgment within 30 days of their signing that contract, that is a red flag, Howell said.
Additionally, consumers should always be given a general price list before discussing any final agreements on a funeral services purchase. It is required by state law that all funeral homes provide such lists.
This makes sure that all families are charged the same price for the same services, Howell said.
"A family should never be asked to make funeral arrangements based on how much money they have, it should always be based on the final wishes of the individual and what type of service the family wants."