The Chicago Tribune has done an article on preneed aggressively sold to a person on disability. This is truly another example about why one should not pre-purchase, prepay a funeral. This type of aggressive salesmanship is not needed or good for the Funeral Business.
The flier that arrived in Carol Rognstad’s mailbox sounded like a great deal. For only $38 a month, she could prepay for her future cremation.
The 48-year-old, who is mentally disabled, prides herself on doing things on her own. So she called the number listed and set up an appointment.
In mid-July, a representative from Warren Funeral Home visited her low-income apartment in Round Lake Beach. Rognstad signed a 60-month contract, in which she agreed to pay a total of $2,280.
But a few months later, Rognstad began having second thoughts. Because she relies solely on her monthly disability check, the $38 payment had a significant impact. Concerned she had done something wrong, Rognstad called her mother, Holly Anderle, and asked for help.
$2,280 USD is far too much to pay for a cremation.
Funeral industry| Funeral News| Funeral Blog by Your Funeral Guy
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There has been another case of Funeral Preneed Fraud, another case of the Funeral Director takes your money in a prepaid funeral contract(Scam).
The most famous case of this in Illinois recently, was a scam hatched by the Illinois Funeral Directors Association in their IFDA Preneed Trust Scam where 100 million + dollars of the of the folks prepaid funeral money in Illinois disappeared. Incredibly at the center of the IFDA scam is the current National Funeral Directors Association(NFDA) Executive Treasurer, Randal L Earl.
Snippet from the current Preneed scam Story:
A former Southern Illinois funeral director has been charged with mishandling funds from multiple pre-need funeral service contracts.
John B. Jones, a former partner with Gaskins-Jones Funeral Home in Harrisburg, faces 11 felony counts of theft and failure to deposit funds into a trust account — all dealing with pre-need funeral arrangements.
A warrant has been issued for Jones’ arrest, but as of Tuesday afternoon, he was still being sought by police, according to Special Prosecutor Charles Zalar with the Illinois Appellate Prosecutor’s Office in Springfield. Bond in the case has been set at $100,000.
The charges were filed last week by Zalar.
He alleges that Jones, 50, of Equality, Ill., accepted payment from various pre-need funeral service clients and failed to purchase life insurance policies or annuities. Jones is accused of putting the money into the funeral home’s checking account to pay for business expenses instead.
The lesson from the Scandal state of Illinois is to avoid funeral preneed or prepaid funerals.
Funeral industry|Funeral News|Funeral blog by Your Funeral Guy
Your Funeral Guy First reported on the California Funeral Directors Association(CFDA) on January 7th, 2010. Click Here for the report.
Now that the scandal has received local coverage in California we can report on this matter more fully because my research has been verified by a State Audit. The scandal is quite similar to the Illinois Funeral Directors Association Scandal. Right now the dollar amount is less than The IFDA Preneed Trust Scandal. That could change.
Early audits in the IFDA Preneed trust scandal did not reveal the extent of the problem. Later on Gross Misappropriation of the Folks Money was discovered. The current situation involves the California Master Trust.
Now that there is a second maor Funeral directors association scandal the national media may take note.
Do Not Hold your Breath.
The audit was the first to find systematic problems with a funeral trust fund(California), Wallinder said. Typically, auditors find problems involving individual funeral homes or trusts set up for individual consumers, he said.
In this case, the department ordered the trust’s governing board to return more than $2 million that was spent on lobbying and conventions for the California Funeral Directors Association. Some of the money already has been paid back, auditors said.
The audit also found the trust failed to pay at least $1.6 million it owed to consumers, their estates or the state treasury in cases where funeral homes went out of business or families paid for funeral services because they didn’t know their loved one had a prepaid plan.
Funeral industry|Funeral News|Funeral Blog by Your Funeral Guy
There is still room for preneed, prepaid, funeral and cemetery fraud around the country. In spite of the Illinois Funeral Directors Association Scandal ($100 million) and National Prearranged Services Scandal(approximately $1 billion) the practice continues on a small scale and a larger scale as well.
The current example comes from Mississippi, were it appears there is a large problem with preneed cemetery fraud.
JACKSON, Miss. — Since Secretary of State Delbert Hosemann took office, his agency has seized five Mississippi cemeteries for mismanaging funds, a scenario that’s playing itself out across the country.
Critics of the pre-paid industry contend that’s because oversight has been poor, and despite states’ efforts to beef up laws, there is still plenty of room for fraud.
Mississippi Secretary of State Delbert Hosemann:
“Misapplying trust funds from someone’s funeral arrangements is literally grave robbing,” Hosemann said. “It is unfortunate that we have to go after these companies in court to recoup the money that is missing.”
Anyone taking from folks preened funeral funds including the IFDA and NPS is guilty of Grave Robbing.
Funeral Industry| Funeral News|
At http://www.southcoasttoday.com an article makes two leaps that often happens in the media and at funeral blogs.
Prepaying funerals are on the rise and is a good thing. Prepaid funerals are on the rise? This not the case according to funeral industry stats and is only funeral director hype. The South Coast today article quotes no statistical studies on the matter- only an informal survey of the newspaper’s funeral homes. Now Preplaning is a must but prepaying is not.
The article implies that the AARP supports prepaying. Officially the organization does not support prepaid funerals and definitely not Joshua Slocum.
The big lie comes next with Funeral Packages Save you money. Even Casual industry observers can quickly see this is not the case.
Although buying a whole funeral package through the funeral home is far more convenient and often less expensive, the Federal Trade Commission has ruled that no one is obliged to buy caskets, burial containers or any other products in-house.
This article is pure funeral spin. It is being promoted at the funeral spin site- Connecting Directors.com Info on the other Funeral Spin article is here.
Funeral Industry | Funeral news | Funeral blog by Your Funeral Guy.
Funeral packages an prepaying will not help you come in under the average cost of a funeral.
Websites like connecting directors have an interest in Funeral Spin because they receive funds from funeral corporations, Newspapers receive funds from funeral homes through the paid obituary.
Last week Small funeral homes in Illinois have lost fiduciary authority over their. preneed funds. Funeral Directors are looking for new ways to bring in income and they are considering knowledge basis of services, end of life services, estate planing, grief counseling etc as a new income source.
The small funeral home owners can thank the Illinois Funeral Directors Association through the IFDA Preneed Trust Ponzi scheme for this.
Last week 10/28/2009 the Governor of the State of Illinois amendatory veto applied to Senate Bill SB1692 was passed by the Illinois Legislature. It can be viewed here.
The funeral homes will have to find a trustee for their preneed funds in 2010.