Office of the Attorney General
Attorney General Greg Stumbo Announces Settlement with Dunn’s Funeral Home over Pre-Need Burial Contracts
Attorney General Greg Stumbo announced today that his Office of Consumer Protection has settled its lawsuit against Dunn's Mortuary, a/k/a Dunn's Funeral Home, and Kyle H. Dunn, of Eddyville, Kentucky, for failing to file yearly reports regarding pre-need burial contracts.
The lawsuit was filed on August 31, 2006, in Lyon Circuit Court, as Civil Action No. 06-CI-165. Soon after, the funeral home filed the missing reports and paid the filing fees due on those reports for calendar years 2000 through 2005.
Under the terms of the settlement, Dunn's Funeral Home and Kyle Dunn are required to pay over $6,541 for civil penalties and costs, with another $6,000 in civil penalties conditionally suspended so long as they comply with the settlement. The Defendants are also required to timely file and pay future reports and fees as they become due, comply with the related statutes and regulations, and set up procedures and a training program to ensure compliance. Additionally, the Defendants will cooperate with, and pay the reasonable costs for, an audit of the funeral home's books and records.
"We are pleased to be able to resolve this lawsuit so quickly," said Attorney General Stumbo. "My Office will monitor this settlement as it continues to protect the interests of Kentucky's consumers."
The Attorney General offers the following consumer tips about making contracts to arrange and pay for funeral services before they are actually needed, also called pre-need burial contracts or prepaid funeral arrangements. (Please note that pre-need funeral arrangements funded through insurance products are exempt from these requirements and are regulated by the Kentucky Office of Insurance.)
- Check that the company or person with whom you contract (the "agent") is licensed with the Attorney General's Office and is up to date on filing reports. Anyone that offers or accepts money on pre-need burial contracts must first get a license, and must file annual reports. Keep in mind that although an agent would usually be a funeral home, it could also be a cemetery or anyone else that sells pre-need contracts for funeral items (such as caskets, vaults, grave liners, and the opening and closing of the grave).
- Know what you are buying and thoroughly review the contract, as with any important purchase. Ask questions about anything you do not fully understand. Find out what will happen if you move or die away from home, or if you want to use a different funeral home. Ask whether the price of your arrangements is guaranteed and what will happen to any balance remaining in the trust fund after your funeral has been performed. Also find out how your payments will be protected if the agent you are dealing with goes out of business.
- Ask if you will receive periodic documentation that all of the money you pay on the contract has been put into trust at a financial institution. 100% of your payments, including any installment payments, must be put in trust with a financial institution within 30 days of receipt. Your payments, and earnings on those payments, must remain in the trust fund until the time of need. Before paying any money from the trust fund, the financial institution must receive a certified statement from the agent that the contract has been fully performed, and must receive a certified or verified death certificate or a provisional death certificate proving your death.
- You are entitled to request a refund, if your contract is not in an irrevocable trust. The refund must be paid within 15 days of your request, and must include all monies you paid and all earnings on those payments.
- Tell your family or another person you trust about your prepaid funeral arrangements and where you keep the related documents. This will help them follow your wishes for your funeral and avoid paying for funeral arrangements elsewhere.
Anyone with questions about Kentucky's pre-need burial contract laws may visit the Office of Consumer Protection's web site at www.ag.ky.gov/consumer or call (502) 696-5389 to request a copy of the "Consumer's Guide To Pre-need Cemetery and Funeral Purchases". The Federal Trade Commission also has information about federal rules for funerals on its web site at www.ftc.gov/funerals, or the FTC at 1-877-FTC-HELP to request a copy of "Funerals: A Consumer's Guide".