When Guillermo and Norma Oropeza bought caskets and burial plots from a Florida funeral home and cemetery in 1992, they thought their advance planning would someday save their family money and stress.

Just before Guillermo, a retired print-shop owner, died in 2010 at age 71, the funeral home told Norma that on top of the $6,800 already paid, she would owe $5,000 for services ranging from prepping the body to digging the grave. Norma, by then living on a modest fixed income, didn’t have that kind of cash to spare.

So the family switched to a nearby home that said it would charge $2,000 less and opted to bury Guillermo, a veteran, in a military cemetery at no charge (they figured they’d sell the other burial plots and caskets later).
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That didn’t end the Oropezas’ stress. Told that state law didn’t allow the family to move the body — not true, as it turned out — Norma was charged $300 to transport Guillermo to the new facility.

Her daughter, Cathy Kurtinitis, says they were pressed to accept add-ons, from a viewing (they had wanted to hold the visitation at home) to printed programs and a memorial web page.

She bought a casket online, only to be told the funeral home wouldn’t handle it. “Instead of helping our family,” says Kurtinitis, “we felt they were just trying to suck money out of us.”

At a typical price of $10,000 or more for a traditional funeral and burial, making final arrangements for a deceased relative is one of the biggest expenses families face.

All too often, unwary funeral shoppers also meet with aggressive or misleading sales tactics from providers that can add substantially to the bill.

“A significant expense, a vulnerable time, a real problem comparison shopping, which is the key to any good purchase — it’s the perfect storm,” says New York City consumer affairs commissioner Jonathan Mintz.

That some providers in the $17 billion death-care industry, as the government calls it, might take advantage of emotionally wrought customers isn’t news.

In the 1963 bestseller “The American Way of Death,” journalist Jessica Mitford was among the first to expose predatory practices in the funeral and cemetery business. Her work helped lead to the 1984 passage of regulations designed to curb abuses. Called the Funeral Rule, the regulations are enforced by the Federal Trade Commission.

Yet a three-month investigation by MONEY has found that consumers still face many of the old hazards — with new twists, as the industry faces revenue pressure caused by a growth in less expensive cremations.

The FTC’s spot check of funeral homes last year found nearly one in four had serious violations of the Funeral Rule, involving their failure to properly disclose prices. Misleading buyers about federal and state law is another common problem. And consumer advocates say grieving families encounter many of the same issues with cemeteries.

Industry training tools obtained by MONEY reveal funeral pros sharing tips on how to hook grieving families into going over their budgets and to divert them from buying cheaper merchandise elsewhere.

And the magazine’s survey of regulators in 48 states shows that financial disputes are growing over pre-need contracts, which allow you to buy funeral arrangements ahead of time and are now one of the top sources of complaints about the death-care industry.

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Patrick Lynch, past president of the National Funeral Directors Association (NFDA), says, “The horror stories are exceptions.” And indeed, many funeral directors are compassionate helpers who follow the rules. Still, one in four is a tough stat. You don’t want your provider to be more eager to line his pockets than to smooth the process for you.

In this story — the first in a three-part series looking at the financial challenges of end-of-life care — you’ll learn about the troublesome tactics you may come up against and the best strategies to counter them. This much is sure: You should be able to lay a loved one to rest in a way that honors his or her memory without paying more than is comfortable for you. And don’t let anyone in the funeral business convince you otherwise.

Next month: Money will feature Part Two in the series, “In Search of a Better End,” about managing the costs of end-of-life care for a terminally ill loved one; and Part Three, “Looking Beyond,” a profile of a man dealing with Lou Gehrig’s disease and planning for his wife’s financial future without him.

Funeral homes: Know your rights

It’s the Funeral Rule’s most basic requirement: Provide cost information over the phone and an itemized price list in person so that consumers can pick the specific goods and services they want and compare costs.

That’s important given the wide disparity in funeral-home prices, even in the same area. An analysis of 10 major cities by Everest, a funeral-planning service, found that the difference in cost for a traditional funeral between the least and most expensive establishments within five miles of each other averages 164%. (See chart on the first page)

Yet a surprising number of funeral homes still fail to follow the rules — 27% of the 507 locations visited by the FTC in the past four years, up from an average noncompliance rate of 13% over the four years prior.

In New York City, one of the few cities or states with their own regs, 30% of facilities visited earlier this year did not have readily accessible price lists.

And when a city investigator, posing as the daughter-in-law of a terminally ill man, phoned funeral homes for pricing, 60% didn’t provide it, as required by New York City law. “Stunning,” says consumer affairs head Mintz. (The violators paid fines.)

The Funeral Rule also gives you the right to buy only the specific goods and services you want. Many families complain, though, that funeral directors pressure them to buy a package, says Lisa Carlson, executive director of the Funeral Ethics Organization, a nonprofit advocacy group.

“Often these packages include a lot of stuff you don’t need, as a way to get you to pay more,” she says. Extras such as grief counseling, digital tributes, and expensive floral displays can easily ratchet up the price.

A common tactic in selling such bundles, says Ed Markin, author of “An Affordable Funeral” is to present three price points. “Most people don’t want to be considered cheap or overly extravagant,” he says, so funeral directors know the family will typically choose the middle option and price accordingly.

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And while federal law requires the price list to be presented to the customer, Carlson says it’s not uncommon for it to be included within a jumble of other package pricing in an effort to “confuse the consumer with too much information.”

Scott Gilligan, general counsel of the NFDA, says that more choice is not meant to confuse the customer, and often packages are offered at a discount. “It’s the same thing that McDonald’s does on its value menu,” he says.

A funeral home may also imply that state or local law requires a particular service, such as embalming, according to consumer advocates. The truth is most states almost never require embalming, and if a body does need to be preserved, refrigeration is just as effective, says Josh Slocum, executive director of the Funeral Consumers Alliance.

Because embalming brings in nearly $700 on average (and as much as $3,000), however, a funeral director might just forget to enlighten you about the facts, says Slocum.

Dan Rohling, a consumer advocate and former cemetery investigator from California, says homes are under pressure “to squeeze as much profit from every customer they can.”

With 43% of funeral shoppers now choosing cremation over traditional burial, vs. just 26% in 2000, the profit per sale earned by independent funeral homes — the vast majority of the business — has fallen 27% in the past 10 years, the Federated Funeral Directors of America reports. Exacerbating the crunch: The industry has high fixed costs, including for embalming rooms, which are required by 37 states.

Related: Seniors: Beware the sales pitch

Financial pressures are also one reason the FTC has filed so few lawsuits against violators of the Funeral Rule — only six enforcement actions have been taken in the past 12 years. With limited resources to pursue costly litigation, the agency instead mostly diverts offenders into a three-year program that provides ongoing training and monitoring for compliance; they also pay fines (average: $6,000 per violator).

Given the scope of the problem relative to identity theft and other consumer complaints, “we are absolutely doing enough,” says Roberto Anguizola, assistant director of the FTC’s marketing-practices division.

Consumer advocate Slocum says since the FTC doesn’t release the names of offending funeral homes or details about the violations, the agency’s effectiveness is hard to judge.

WHAT YOU SHOULD DO

Check prices at three homes, minimum. Four out of five consumers don’t shop around when planning a funeral, AARP reports. Don’t feel pressured to go with the first place you see or the one everyone you know used; you can compare costs by phone or online in less than a day.

Ask about both the mandatory basic-services fee, which covers the time and overhead of the funeral director and staff, and itemized charges for the additional services you select.

Get help with the search. If collecting multiple quotes feels too daunting, try efuneral.com or Everest’s Price-Finder tool, good for pricing up to eight homes in your area ($29, everestfuneral.com).

You can also sometimes get discounted rates through your local branch of the Funeral Consumers Alliance (funerals.org).

Beating the high cost of caskets

With average prices ranging from $2,400 (for steel) to $3,500 (wood) and some copper and bronze models going for $10,000 or more, the casket is usually the most expensive item in a funeral.

The good news: Discount suppliers are growing in number, from independent online sellers to retailers like Costco and Wal-Mart, where coffins often go for less than half the price of comparable ones sold by funeral homes.

The bad news: Funeral homes don’t make it easy for you to take your casket business elsewhere.

In some cases, funeral directors may refuse to accept outside merchandise or charge a handling fee, which violates the Funeral Rule. The practice resulted in one of the three enforcement actions by the FTC this year: In June, Andrew Torregrossa & Sons Funeral Home in Brooklyn agreed to pay $32,000 to settle charges that it had refused services to two families (one was an FTC secret shopper) unless they bought a casket in-house.

Owner Andrew Torregrossa called the incidents “unfortunate” and declined further comment.

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In the February issue of the trade publication Funeral Services Insider, funeral directors anonymously shared other tactics for handling customers who want to buy merchandise elsewhere. Several suggested raising the basic-services fee to offset lower merchandise revenue. Another favored disparaging the quality of outside vendors by saying, “Go ahead. But we are offering American-made products and not Chinese-made.”

The publication also recommended buying caskets from firms that create private labels: “It will have a different model number, and the family won’t know it’s the exact same option available at another firm.”

Choosing cremation won’t inure you to the casket push. A growing number of funeral homes offer casket rentals, usually for $800 or so, to view the body and expensive urns and containers for the remains.

Some also encourage buying a casket outright for the cremation, even though a cardboard box is sufficient.

Directors may try to get around that with questions that imply going without a casket is less than savory, says Markin. “They might say, ‘Would you like a chance to say goodbye?’ When the grieving party agrees, the funeral director might say, ‘Well, you don’t want to see your mom laid out in a cardboard box.’ Suddenly you’re back to buying a coffin.”

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Gary Runes, a retired dentist from Tiburon, Calif., experienced this while making arrangements for his aunt’s cremation in 2007. She had prepaid the cremation fees, but the funeral director “assumed we would buy a coffin to put her in,” says Runes. “At first, that was the only option offered. I had to ask if there was a plan B — and only then was I told a cardboard box was all that was required, and it was already covered in the cost of the cremation.”

Runes says he was also pitched other products, such as amulets and special urns for “safeguarding” the ashes. Slocum says it’s not uncommon to receive cremated remains in a box or a bag marked “temporary container” to get you to buy a pricey urn.

WHAT YOU SHOULD DO

Look outside the home. Check out retailers like Costco.com, whose bestselling casket goes for $950, including shipping. Another direct supplier with a wide selection, BestPrice Caskets.com, has free ground shipping. Most caskets can be delivered within a day.

Ask for more options. Casket shoppers generally buy one of the first three models they’re shown. Press for more choices and ask to see a catalogue, says Markin. Also request 20-gauge steel, not 18-gauge, which is thicker and costs $700 to $1,000 more. Markin says, “Both are suitable, and no one would know the difference.”

High-pressure funeral sales tactics

“Upselling Without Upsetting the Client” is one of the continuing-education courses approved by 27 state boards for funeral directors to maintain their licenses.

The online class, which a MONEY writer signed up for, advises funeral directors about techniques to persuade customers to buy more than they need. The sweet spot for going above a client’s budget: 20%.

The course instructor encourages funeral directors to ask about the family’s budget, then say, “We are going to stay as close to that number as possible” — conditioning customers to think prices will stay within reason. Then directors are urged to use phrases like, “We might go a little over your budget, but this particular add-on will go perfectly.”

Lynch, the former NFDA president, calls the title of the course “tacky and inappropriate” and says he’s not familiar with its content. But in general he says upselling is not the norm. “The service we render for folks is far more important than the stuff we sell them,” he says. “If we treat people properly, the sales will take care of themselves.”

And yet many homes do offer a slew of extras: memorial videos and websites, fancy vehicles for the funeral procession, keepsake jewelry (say, a pendant that holds ashes), even a white-dove release for the memorial service (six birds with music might run $200).

“It’s not unethical; it’s just business,” says funeral director Joe Kalmer, a 23-year industry veteran, who left a traditional facility in 2009 to open a discount home. (He keeps prices down by lowering overhead — he has a single van, not a fleet, to transport bodies, and doesn’t store a supply of caskets.)

Special services that add to the cost of cremations are becoming more common too.

In a July webinar offered by the NFDA, consultant David Nixon suggested offering “private time to say goodbye with the body, or making up a body that hadn’t been embalmed with cosmetics to create a better memory picture.” In an interview, Nixon said funeral directors’ experience and training justifies extra fees for these services: “We’re providing added value that helps make a loved one’s passing a little easier.”

Related: Funeral cost-cutting boosts cremations

Not everyone sees it that way. Max Miller, a technology consultant from Los Angeles, was put off by the pressure he says he faced to buy add-ons when his father died at 65 two years ago.

The family wanted a simple cremation and memorial. After being quoted $1,300 over the phone by one funeral home, Miller went with his wife and mother to finalize the arrangements. Once there, they were pitched a decorative box for the remains, a memorial video, and elaborate decorations.

“They insisted we buy a mandatory package with a floor of $2,600, even though we didn’t need the components,” says Miller. His family left, later finding a direct cremation service that charged a flat $895 fee.

WHAT YOU SHOULD DO

Detail your wishes now. After planning funerals for his mother and two aunts, California dentist Runes and his wife created an end-of-life document spelling out how they want their deaths handled for their two daughters. Knowing what you want ahead of time helps loved ones avoid being upsold later, says Gail Rubin, author of “A Good Goodbye.”

Bring a wingman. A friend who’s less invested can help you make decisions with a clearer head, says Brian O’Laughlin, a Kansas City, Mo., funeral planner.

Shop with a list. Funeral homes play on your emotions by presenting the priciest options first, says Rohling, the consumer advocate: “It gives the impression the lower you go, the cheaper you are — the less you thought of your loved ones.”

Solution: Research options at the funeral home’s website and decide what you want before going in.

Complaints about cemeteries

The hard sell you may get at funeral homes can happen when you’re arranging the burial too. There’s a crucial difference: At the cemetery, there are no federal statutes like the Funeral Rule to protect you, and few states have regulations about sales practices either. Only six states require price lists, for example, says the Funeral Ethics Organization.

Yet equally big bucks are at stake. A single plot runs about $1,500 to $6,000, depending on where you live, according to IbisWorld, and you’ll pay from $600 to $2,000 or more for cemetery workers to dig and re-cover the grave (you’ll pay more if the burial is on a weekend).

Then there’s the grave marker, which could mean $250 for a basic headstone or thousands for an elaborate bronzed, personalized monument.

To boost sales, cemeteries are also expanding offerings for cremation customers — only 15% buy merchandise, and when they do, they spend $700 on average, vs. $1,600 by families opting for a traditional burial, according to Janney Capital Markets.

Among the more common products: a niche, which is a recess in a wall where families can store an urn with cremated remains; and a bench ($3,000 at one Fort Lauderdale cemetery) or a “bench estate” for multiple family members ($15,000) in a “scattering garden,” where relatives can spread the deceased’s ashes and later visit.

Although no federal agency and as few states tracks cemetery complaints, Carolyn Jacobi of Eternal Justice, a cemetery consumer advocate, says she gets as many as 40 calls a day from families detailing problems similar to those heard about funeral homes.

A typical one, says Jacobi: operators telling families they have to buy a grave marker from the cemetery, not an outside vendor. Or a cemetery says the “law requires” a burial vault (average price: $1,195) to prevent the earth from sinking as the casket deteriorates. It’s the cemetery, not regulators, that requires the container, which makes the grounds easier to maintain; a $400 concrete box called a grave liner is as effective, Jacobi says.

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Since cemeteries, unlike funeral homes, are not required to give you a price list, you also can’t tell if you’re being charged fairly, Jacobi says.

A sales manager at Memory Gardens Memorial Park in Medford, Ore., lost his license last year after a judge found he had charged an elderly couple $495 each to dig and then fill in “urn garden plots.” The price on the cemetery’s internal list: $95.

The manager also slipped in a nonexistent $75 processing fee, according to Oregon cemetery-board records, violating laws on misrepresentations. The manager’s lawyer, Dean Alterman, says the mispricing was an “honest mistake,” and the state overreacted.

Consumer advocates say cases like this underscore the need for oversight.

Congressman Bobby Rush (D.-Ill.) has twice proposed legislation to extend the Funeral Rule to cemeteries and intends to try again next year.

The International Cemetery, Cremation, and Funeral Association (ICCFA) says examples of wrongdoing are real but not pervasive enough to justify more regulation. It would be “legislation by anecdote,” says executive director Robert Fells, adding the group does encourage members to disclose prices and offers training to improve sales practices.

The one aspect of cemeteries that states do regulate: ensuring that the money consumers pay for ongoing maintenance, called perpetual care, is invested properly. Most states require that a percentage of revenue from plots be set aside in a trust — 10% in Virginia and 15% in Michigan, for example — that pays for upkeep of the grounds.

But some cemeteries may collect the money and not do the job, according to state regulators; in Texas, for example, poor care and maintenance are the most common consumer complaints, says deputy banking commissioner Stephanie Newberg.

Fells acknowledges that inadequate funding sometimes hinders proper upkeep; by law, he notes, cemeteries can tap only the income from the trust, not the principal, and low interest rates have eaten into returns. This particularly affects independent cemeteries, which make up 64% of the industry (the remainder are three large chains) and can’t spread costs among multiple facilities.

WHAT YOU SHOULD DO

Follow your own Cemetery Rule. Although not required to do so by law, the cemetery should give you a price list on request, says Fells. Also ask for its rules in writing, Carlson says. When cemeteries hedge, Carlson explains, “it’s a red flag that they’re making things up as they go along.”

Enlist an advocate. If a cemetery insists on a burial vault or anything you’re not sure is necessary, contact Funeral Consumers Alliance or Eternal Justice (eternaljustice.com). They can help you distinguish real rules from misinformation to get you to spend more.

Claim military benefits. Did your deceased loved one serve in the armed forces? Honorably discharged vets, their spouses, and dependent children are entitled to be buried free within a military cemetery. Find one at http://www.cem.va.gov.

NEXT: Problems with prepayments

Problems with prepayments

Prepaid arrangements promise to save your family money and stress by allowing you to plan a funeral and lock in prices years early. You choose the arrangements and pay the bill upfront. The money goes into a trust account or an insurance policy until the services are needed. Good deal, eh?

Not so much. With charges ranging from difficulty getting refunds to mismanagement of funds, prepaid contracts are high on the list of complaints about the death-care industry, the MONEY survey of states found.

In Kansas, for example, 28% of complaints over the past five years have been about such products; in Maryland they were the top complaint, at 38% of the total. Indeed, paying in advance for funerals has proved so problematic that the FTC, AARP, and the Consumer Federation of America all recommend against it.

Yet prepaid sales are up sharply. At Service Corp. International , the largest funeral chain, prepaid contracts rose 28%, to $1.1 billion, over the five years ending in 2011, according to the company’s financial statements.

That success is due at least in part to clever marketing that combines standard sales pressure with emotional tugs.

At a recent SCI free-dinner seminar in Davie, Fla., speakers stressed that funeral planning is complicated (“There are 72 different decisions to make!”) and draining (“We don’t want you coming here on the worst day of your life!”).

Sales reps at each table urged attendees (including a MONEY writer) to fill out a questionnaire about their preferences, which were entered in a drawing to win a Kindle. And if you signed up by month’s end, you’d get a 20% discount — on what was unclear, since no price lists were handed out. Asked about the appropriateness of those sales tactics, an SCI spokesman simply said the product was a good deal for consumers.

Signing up often seems like a low-risk proposition, since providers usually promise you can transfer your contract to another facility. However, seven states don’t guarantee the right to transfer your contract, and two more allow it only if you relocate — you can’t just change your mind, according to a 2011 NFDA report. Depending on the state, you may also have to pay fees to make the switch.

Laws also differ about how much, if any, refund you’re entitled to. If your contract allows you to cancel, you may pay a fee ranging from interest earned on the account to 25% of its value. Loopholes in the terms may further reduce your refund.

States require funeral homes and cemeteries to set aside a percentage of the money customers prepay. But some allow providers to keep funds paid for merchandise if they can show they’ve delivered it — sending an urn to your home or storing a casket for you in a warehouse.

Advocates say some places inflate the value of the merchandise to avoid setting aside or refunding your money. In 2009, Neptune Society, a cremation company, paid $630,000 to the state of Colorado to settle accusations it did just that — for example, charging $349 for an urn valued at about $13.

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The Department of Insurance is still investigating to see whether the practice continues, says spokeswoman Marianne Goodland. Neptune says that it follows all rules on trusts and refunds and the situation in Colorado was an isolated incident.

It’s also possible to shell out thousands more on a prepaid contract than the funeral costs. That can happen when you buy an insurance policy and pay over time instead of in a lump sum, as Jo Swiger’s family discovered.

In 2004, at 89, Swiger bought a Lincoln Heritage Life policy to cover expenses for the $8,700 funeral she had chosen and spread payments over three years. Cost: $15,688 in premiums.

After her mom died in 2011, daughter Ann Bauer learned that the policy, which had a savings account that grew over time, would pay out only $10,807. “I don’t understand how they can call that an insurance policy,” says Bauer, an account manager at a San Diego radio station.

Lincoln vice president Shirley Grossman says most of its customers are younger and have time for benefits to grow, and adds that Lincoln no longer sells multiple-payment policies to customers over 85. But anyone who pays over time can expect to pay 40% more than the arrangements’ price, says William Stalter, a Kansas lawyer who helps funeral homes create prepayment plans.

Finally, regulators report frequent and rising instances of mismanagement and fraud with prepaid contracts, a December report from the Government Accountability Office found. Regulation is uneven, and many states lack the funds to enforce the rules, says Lynne Nelson, compliance manager of Oregon’s funeral and cemetery board.

WHAT YOU SHOULD DO

Just say no. You don’t need to buy a special product to set aside money for final arrangements. You may have enough life insurance to cover the bills. Or, set up a “payable on death” account at the bank, making funds available once there’s a death certificate to reimburse funeral expenses. If you don’t want your family to have to put up the money in advance, create a joint savings account with someone you trust to pay the bills.

Kurtinitis and her husband, George, don’t want their family to endure what she and her mom did when it was time to put her stepdad to rest (they’re still trying to sell the unused caskets and plots on Craigslist). So they’ve planned burials in a military cemetery (he is a vet) and a simple viewing in their home. “We don’t want our family to end up with a bill for thousands,” she says. “People need to remember: This is your family member, your burial, your business.”