Announced Action for July 7, 2005

Commission approval of advisory letter: The Commission has issued an advisory opinion setting forth its construction of the term “cash advance item” as used in the FTC’s Funeral Rule, 16 C.F.R. § 453.1(b) (the Funeral Rule or the Rule). Correct interpretation of the term “cash advance item” is important because it determines the breadth and impact of certain substantive provisions of the Funeral Rule that employ that term. The opinion, which is available on the FTC’s Web page as a link to this press release, was developed at the request of Texas State Representative Dan Flynn who, in his letter requesting this opinion, indicated that he is working on legislation on this topic.

The opinion letter rejected any interpretation of the term “cash advance item” as encompassing all goods or services purchased by a funeral provider from a third-party vendor. According to the letter, “this interpretation sweeps far too broadly, potentially bringing within its scope every component good or service that comprise a funeral. This was not and is not the Commission’s intention in the ‘cash advance’ provisions of the Rule.” The opinion letter further states that the term “cash advance item” in the Rule applies only to those items that a funeral provider represents expressly to be “cash advance items” or represents by implication to be procured on behalf of a particular customer and provided to that customer at the same price the funeral provider paid for them. The letter explains the analysis leading to this conclusion.

The Commission vote approving issuance of the advisory letter was 4-0. (File No. R P034410 staff contact is Catherine Harrington-McBride, Bureau of Consumer Protection, 202-326-2452).

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

Media Contact:

Office of Public Affairs
202-326-2180

Federal Trade Commission Advisory Opinion On The Lawful Construction of the Term "Cash Advance Item," As Used in the Commission Funeral Rule, Issued in Response To A Request From The Honorable Dan Flynn, Member, Texas House of Representatives (July 7, 2005)

• Text of the Commission Advisory Opinion
• Text of the Request