Harrisburg, PA – On Wednesday, October 21, the Pennsylvania State Senate passed Senate Bill 874, legislation that would amend the Cemetery and Funeral Merchandise Trust Fund Law. This consumer protection bill was introduced by State Senator Tom McGarrigle and was passed by the Senate 26-20.
The legislation better protects consumers by prohibiting a practice known as “constructive delivery”, thus insuring that funds will be maintained in trust and available at the time of need. The bill also provides for a return of funds if the purchaser cancels the contract prior to performance. These changes will help protect the increasing number of individuals who choose to enter “pre-need” contracts for funeral services and merchandise.
Currently, the Cemetery and Funeral Merchandise Trust Fund Law (Act 459 of 1963) requires sellers of funeral services and merchandise that are to be delivered at a future date (pre-need) to deposit 70% of the purchase price into a trust fund account.
Some in the industry have misinterpreted the law and sought to avoid the 70% trusting requirement through the use of “constructive delivery” of certain merchandise prior to the time of need. Certain merchandise, such as caskets and burial vaults, are purchased prior to the time of need and purportedly set aside for the purchaser but never actually delivered to the purchaser. Claiming that the merchandise has been delivered, sellers then retain 100% of the sale price rather than complying with the trusting requirements.
Senator McGarrigle commented, “This is an important piece of consumer protection for those who enter into pre-need contracts for end of life services. The mission of this legislation is to ensure that when the purchaser of these goods and services passes away, the money that they provided to cover their funeral and burial costs has been protected and is immediately available.”
Senate Bill 874 will now head to the Pennsylvania House of Representatives for consideration.