ABC: Funeral industry under scrutiny over high costs

When a family member dies, the grief is usually overwhelming and the last thing most of us want to do in that situation is compare quotes from funeral homes.
That tendency to avoid shopping around and a lack of transparency about cost is leading to many vulnerable families being overcharged.
Read the full InvoCare statement to 7.30 here.

 Transcript

LEIGH SALES, PRESENTER: When a family member dies, the grief is usually overwhelming and the last thing most of us want to do in that situation is compare quotes from funeral homes.

That tendency to avoid shopping around and a lack of transparency about cost is leading to many vulnerable families being overcharged.

The $1. 6 billion funeral industry is dominated by a few major players and tonight 7.30 can reveal exclusive data finding the big chains can charge thousands of dollars more than their independent rivals.

Michael Atkin reports.

JANE SINCLAIR: She certainly passed on her passion. I think it's in the DNA.

MICHAEL ATKIN, REPORTER: Jane Sinclair gets her artistic flair from her mother who raised her to push creative boundaries.

JANE SINCLAIR: They're very much believing in freedom and allowing children free rein and creativity.

MICHAEL ATKIN: In 2011, her mother, Jean Langley, spoke to the ABC about mixing with a group of bohemian artists after World War II including Sidney Nolan and Arthur Boyd.

JEAN LANGLEY, ARTIST (2011): You see it away with the old. We have to cast off the oppressions and the controls of the past.

MICHAEL ATKIN: Two years ago Jane and her sister scrambled to find a funeral provider as their mother lay dying.

JANE SINCLAIR: We sat next to Mum with the laptop. We didn't really consider the cost. It's just a presumption that it wouldn't be that much of a difference.

MICHAEL ATKIN: They chose Melbourne funeral home, Tobin Brothers to organise a cremation without a service costing almost $5,000.

Part of the charge was a professional service fee for $3,200.

JANE SINCLAIR: I was extremely shocked. I couldn't believe, because it was such a basic service.

All they had to do was pick up our mother's body, take it to the morgue and then pick it up from the morgue, take it to the crematorium.

MICHAEL ATKIN: Jane discovered months after the cremation that the fee was far more than what other funeral providers were charging.

She sought an explanation.

JANE SINCLAIR: They didn't even try to explain why it was more expensive. Basically the end of the letter was sort of saying well, we suggest people shop around really.

And my problem with that is that it's really not a good time to shop around.

It made me think this is not right.

JAMES MACLEOD, MANAGING DIRECTOR, TOBIN BROTHERS: We have arguably the best facilities, the most highly trained staff in the industry and our charges are very transparent and available on our website.

MICHAEL ATKIN: Managing director, James MacLeod, has defended the behaviour of Tobin Brothers but he has refused to explain why the service fee was so high.

JAMES MACLEOD: That's the service fee that is charged for a no-service cremation.

The family in question contacted us before engaging us, many hours before engaging us and received a full detailed, itemised fee proposal.

MICHAEL ATKIN: But other industry figures say the professional service fee should be closely watched.

ROSS POKERE, HEAVEN FUNERALS: It's very high, yes. For a no-service cremation, which is the least expensive way that someone can take care of their loved one, the amount of time involved for the funeral director is maximum sort of four hours, five hours.

MICHAEL ATKIN: Andrew Pearson's mother died four years ago and he helped his family make arrangements.

When he arrived at his sister's Brisbane home, a sales rep was spruiking an $11,000 funeral service.

ANDREW PEARSON: Well, the lady there was basically said to secure it you have to provide a deposit. I think it was $3,000 from memory and I sort of said, "No, can we stop and discuss this first?"

So this is a leaflet that we prepared for Mum's funeral.

MICHAEL ATKIN: Instead, Andrew found an independent funeral home which did the service at the same venue for about a third of the price.

ANDREW PEARSON: I think we got value for money, we didn't get ripped off.

They're capitalising on people at a low time in their life, when they're grieving and they just extract every penny out of you that they think they can.

COLIN WONG, GATHERED HERE: When you look at the average between the cheapest and the most expensive option for a basic funeral in Australia, that's $5,066.

MICHAEL ATKIN: After a bad experience of his own, Colin Wong started a website which compares the cost of funerals across the country.

COLIN WONG: I cold-called hundreds of funeral homes, mystery shopping and we got the prices that they told us and we put them online.

Most of the nearby funeral homes are offering a no-service cremation between $1,700 and $2,500.

You'll be able to see White Lady Funerals. Their estimated cost is $4,905 for a no-service crenation. So, significantly more expensive.

MICHAEL ATKIN: He's crunched the numbers on the cost of funerals for 7.30.

Even for the basics like a cremation without a service, some providers are charging high prices. The most expensive is a whopping $8,800.

A basic cremation is cheapest in South Australia, and most expensive in New South Wales.

COLIN WONG: The average cost of a funeral in Australia is $5,900. This varies from state to state.

So in Western Australia, it's the most expensive at 15 per cent above the national average.

South Australia is cheapest at 14 per cent lower than the national average.

MICHAEL ATKIN: It's not widely known that household brands like White Lady and Simplicity Funerals are owned by the dominant market player, InvoCare.

Colin Wong says if you pick a premium brand, you may pay a premium.

COLIN WONG: InvoCare funeral brands were, on average, up to 22 per cent more expensive and independents were up to 9 per cent cheaper.

MICHAEL ATKIN: InvoCare declined to be interviewed but in a statement questioned whether the analysis fully accounts for its low cost brands like Value Cremations which offers cremations in Brisbane for lower than the average price.

Ross Pokere runs a small independent funeral home south of Brisbane.

ROSS POKERE: Heaven Funerals, this is Ross speaking.

MICHAEL ATKIN: And provides detailed phone quotes, something he says all families should insist on.

ROSS POKERE: Do your homework. Get some quotes. Just because Nanna was taken of by one of those big firms beforehand, it's probably time to rethink your processes as a family and to get some quotes.

COLIN WONG: I definitely think there should be a national standard for price transparency and consistency.

JANE SINCLAIR: My feeling is the only way around it is some sort of regulation, some sort of consumer protection to stop people just being able to charge what they like, charging like wounded bulls.

 

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