A city report is charging that a Houston-based international conglomerate has been quietly taking over local, family-owned Jewish funeral homes and inflating prices.
The result is that a Jewish funeral in Manhattan at a funeral home run by Service Corporation International costs 50 percent more than at an independent firm, according to the report issued this week by the Department of Consumer Affairs.
The department is asking state Attorney General Eliot Spitzer to investigate anti-trust violations against SCI, which owns all but one Jewish funeral home in Manhattan and many others in the five boroughs.
"We will urge the state to take action," Consumer Affairs Commissioner Jules Polonetsky told The Jewish Week.
An anti-trust action could lead to SCI being required to sell several of its Jewish funeral homes, which funeral industry experts say would mark the first time a city government has formally addressed the issue of corporate ownership of funeral homes.
Some states have considered forcing corporations to identify themselves "on their marquees," according to Funeral Service Insider, a trade magazine, but no municipality has ever approved such legislation.
The three-month department investigation found that the average cost of a funeral at an independent Jewish funeral home outside of Manhattan is $3,182, while the average price of an SCI-owned Jewish funeral in Manhattan is $4,716. The price at the one independently owned Jewish funeral home in Manhattan is $3,820.
Polonetsky warned that if SCI’s consolidation of local mom-and-pop Jewish funeral homes continues, funeral prices will likely rise even more.
"Prices will continue to rise as SCI buys more and more funeral homes to the point where funerals will not be near affordable. Indeed for many people, a funeral is already unaffordable," he said.
"Consumer Affairs has determined that one corporation, Service Corporation International, has obtained so many funeral homes in some areas of New York City that it’s almost pointless to do comparison shopping" the report stated.
A spokeswoman for Kasirer Consulting, which represents SCI, declined to comment on the substance of the report.
"We can’t respond to a report we have not seen," said Kim Savard, partner to Suri Kasirer.
(Kasirer, the wife of Mayor Rudolph Giuliani’s former chief of staff, Bruce Teitelbaum, has come under fire recently for lobbying the city on behalf of private firms, including SCI, without filing required credentials. She has since registered as a lobbyist, but Giuliani has ordered city agencies not to do business with her. The mayor, however, has approved Savard.)
Asked about Consumer Affairs’ request for an anti-trust probe against SCI, Savard said, "We’re cooperating fully with the AG’s office."
However, Polonetsky said an official request by his office had not been made to Spitzer. Informed of that, Savard said the Attorney General’s office apparently has been investigating SCI for two years.
In the 27-page Consumer Affairs report, a copy of which was obtained by The Jewish Week, the department listed a host of problems not only with SCI but in the city’s funeral industry. DCA also listed actions the city will take to correct them.
Among the findings:
#n There is a continuing trend of consolidation of city funeral homes. SCI now owns at least 10 percent of the 607 registered funeral homes in New York and conducts about 13 percent of the funerals.
# SCI owns five of six Jewish funeral homes in Manhattan: Riverside Memorial, Plaza Memorial, Gramercy Park Memorial Chapel, Plaza West-Riverside Chapels and Frank E. Campbell.
# SCI hides its ownership of longtime neighborhood Jewish funeral homes. "This inhibits consumers who are trying to shop around for the best price," the report charges. In Brooklyn, Garlick, Kirshenbaum and I.J. Morris are SCI-owned.
# Funeral homes are selectively discounting caskets, a possible violation of Federal Trade Commission rules. "Jewish people who choose to bury their deceased in a traditional plain pine box can pay as much as $795 or as little as $195 depending on where they shop," the report said.
# Funeral homes are transporting dead bodies around the city to "embalming centers" without notifying relatives. In some cases, Polonetsky said, this has caused problems for religious Jews who require a "watchman" over the body.
# Monuments are being forced on grieving customers "without giving them appropriate consideration."
To "combat these problems," DCA announced it will take the following steps:
# Ask the attorney general to begin an anti-trust probe. The probe was started under former Attorney General Dennis Vacco but stalled when he lost to Spitzer in November.
# Require funeral homes to make their price lists available in a public area of the funeral home so that consumers can comparison shop without having to sit through an interview.n Require funeral homes to post a sign identifying who owns the business.
# Ask the FTC to investigate the legality of selling caskets at prices lower than the prices listed. DCA will also ask Spitzer to look into this practice.
# Require a separate contract for buying monuments, and require the contract to clearly state that the monument does not have to be purchased at the time of the funeral.
The agency said that after buying a car and a home, "a funeral is the most expensive purchase many consumers will ever make."
It argued that bereaved customers have traditionally relied on the advice of the trusted neighborhood funeral director who likely has handled other services for the family in the past.
"Dependence on a funeral director’s advice is based on generations of tradition, where funeral directors were often a leading figure in their community and were, in many cases, seen as an extension of the clergy," the report said.
But with consolidation, "consumers often end up buying high-priced funeral extras they do not want, or need, and they end up paying more for a funeral than they should."
DCA said 80 of the 607 funeral home registrations in the city are owned by SCI or its largest competitor, Loewen. SCI, one of the largest funeral operations in the world, owns 69.
SCI also practices "clustering," or buying up funeral homes in a neighborhood, and raising prices, the report said. It cited as a prime example SCI’s purchase of Jewish funeral homes in New York City, where SCI has half of the 28 homes, including the five of six in Manhattan.
This enables SCI "to raise prices because Jewish residents of Manhattan have no alternative unless they want to leave the borough.
"Making matters worse, the report said, is that SCI intentionally conceals its corporate ties."
When DCA called virtually every funeral home in New York City asking if the operation was family owned or owned by a chain or major corporation, many funeral homes that said they were family owned were later found out to be owned by SCI," the report said.
Confronted with the inaccuracy, the report said one worker responded: "We’re all like family here, so one would think if asked about it being a family-owned business, of course you would say yes."
In another case, a former SCI funeral director told Consumer Affairs that employees are pressured to sell flowers, even though Jewish tradition refrains from it.
The report is full of anecdotes from unnamed funeral clients who complained that they were victimized by SCI. The agency also stated that several anecdotes were composites of several complainants.
One composite anecdote related a Jewish man who was sold flowers and embalming by a Riverside funeral director, both of which are practices contrary to Jewish tradition.
"I brought my father to Riverside because that’s where my grandparents funerals were held, and I thought they would guide me in the right direction," the "customer" said.
The report noted that SCI-owned Riverside advertises itself with the slogan "For generations, a symbol of Jewish tradition."
- Rudolph Giuliani
- Eric J. Greenberg
- Bruce Teitelbaum
- Suri Kasirer
- Riverside Chapels
- Kim Savard
- Jules Polonetsky
- Kasirer Consulting
- Consumer Affairs
- chief of staff
- New York
- Social Issues
- Staff Writer
- attorney general
- Eliot Spitzer
- Mayor Rudolph Giuliani's former chief of staff