Business ProfileforNeptune Society

As of May 1, 2024

The California Attorney General, along with the District Attorneys of Alameda and Marin counties, and city and county of San Francisco, announced a settlement with Service Corporation International (SCI), the nation’s largest funeral service provider, which does business in California as the Neptune Society and the Trident Society. The settlement, which is subject to court approval, resolves the People’s enforcement action alleging that Texas-based SCI violated the Unfair Competition Law (UCL) and False Advertising Law (FAL) by engaging in false advertising and unlawful and deceptive acts in its marketing and sale of pre-need cremation packages. The proposed settlement, in the form of a stipulated judgment, provides full restitution to consumers, comprehensive injunctive relief, and $23 million in civil penalties.

Pre-need cremation packages are a way for people to pre-pay for their cremation services while they are still alive. California law requires that all money paid for pre-need funeral arrangements be placed in trust until either the beneficiary dies and services are provided, or the consumer cancels the contract, at which point the consumer is entitled to a full refund.

The lawsuit alleges that SCI deceptively marketed its products in a variety of ways, including by misleading consumers about its trusting practices, refund policy, and veterans’ burial benefits and cremation. Among other things, SCI routinely informed customers that they had 30 days to cancel their plans and receive a full refund, which is deceptive because pre-need customers are entitled to cancel and receive a full refund at any time before services are provided.

Sold through its Neptune and Trident locations in California, SCI’s highest-selling pre-need cremation package is one that the company marketed as the “Standard Plan.” The Standard Plan includes both cremation services and merchandise but was marketed and sold to customers as a single plan with a single price. Importantly, the Standard Plan was strategically priced to be cheaper than (or comparably priced to) stand-alone cremation services in order to induce consumers into purchasing the Standard Plan. However, when it came time to sign, SCI presented consumers with two contracts, one for heavily marked up merchandise, and one for deeply discounted cremation services. SCI then placed into trust only the discounted funds it allocated to the cremation services, keeping out of trust the funds it allocated to merchandise. Through this practice, SCI withheld from trust more than half of the total price of the Standard Plan.

Further, when a Standard Plan purchaser requested a refund, SCI only refunded the portion it had allocated to cremation services and not any of the money allocated to merchandise. In other words, SCI typically refunded less than half of a consumer’s money. The complaint alleges that these practices violate California law, which requires funeral service providers to provide a full refund of the amount paid for the entire pre-need cremation package at any time before services are rendered.  This hurt consumers and their families, and allowed the company to artificially inflate its profitability.

Under today’s settlement, SCI will pay a $23 million civil penalty, pay full consumer restitution to the consumers who cancelled their plans but did not get a full refund, and be subject to strong injunctive terms which provide meaningful protections for California consumers. Among other things, SCI and its California locations Neptune Society and Trident Society must:

Cease selling the Standard Plan or any similar package unless all money paid for the plan or package, as well as money paid for any collateral agreements, is placed into trust.

Provide clear written disclosures informing consumers of their rights under California law and that consumers are not required to purchase additional products or services in order to purchase pre-need cremation services.

Provide a full refund upon request to any consumer who cancels a pre-need funeral agreement.

Comply with California law when advertising events or presentations regarding veterans’ benefits.

LINK: https://oag.ca.gov/news/press-releases/attorney-general-bonta-announces-service-corporation-international-nation%E2%80%99s

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As of December 2, 2019, the California Attorney General, in and For the County of Alameda, Case# RG 19045103, to wit;

California Attorney General Xavier Becerra today, along with the District Attorneys for the City and County of San Francisco, Alameda County, and Marin County, filed a lawsuit in Alameda County Superior Court against Texas-based Service Corporation International and its subsidiaries doing business as Neptune Society (Neptune). The lawsuit alleges that Neptune -- a company offering pre-need cremation service plans for purchase prior to a customer's death -- engaged in unlawful business practices and systematic misconduct in connection with the marketing and sale of those plans. The lawsuit includes allegations that the company broke California law by failing to hold in trust for the benefit of its customers a substantial portion of the money they paid for these plans and that it misled customers concerning this illegal practice.

California law requires companies selling pre-need funeral plans to hold their customers' payments in a fully refundable pre-need trust until the service is provided. The complaint alleges that, instead of honoring this requirement, Neptune illegally kept more than $100 million that should have been placed into trust. Neptune did this by steering customers into a plan that bundled cremation services and merchandise, and it then illegally pocketed the money it allocated to merchandise. Neptune deceived consumers regarding whether amounts paid for the plan would be held in trust, as required by California law.

Because of the alleged practice of mis-allocating funds and the contract manipulation, many of Neptune's customers failed to receive the full refund to which they were entitled when cancelling their contracts. Thousands of the company's other California prepaid customers could face the same consequence.

In addition to allegations relating to its misleading bundling plan, the lawsuit alleges that Neptune falsely claimed to use its own crematoriums when in fact it contracted with others. The company also included illegal terms in installment contracts that accelerated payments when customers died and forced customers in California to file lawsuits against Neptune in Florida.

Finally, the company failed to provide legally-required disclosures on mailers which advertised seminars that purported to provide information concerning Veterans benefits. California law requires these disclosures to ensure that veterans are not misled about their rights.

For further information please contact:
Attorney General's Office
California Department of Justice
Attn: Public Inquiry Unit
P.O. Box 944255
Sacramento, CA 94244-2550
Public Inquiry Unit
Voice: (916) 210-6276 or
(Toll-free in California)
(800) 952-5225
Fax: (916) 323-5341

Link:
https://oag.ca.gov/news/press-releases/attorney-general-becerra-files-unlawful-business-practices-action-against