Funeral chain agrees to fine

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PORTLAND (AP) – The nation’s largest funeral chain has agreed to pay a $7,250 fine and to stop using prepaid funeral dollars to invest in the stock market.

The recent agreement between the state and Houston-based Service Corp. International, which owns 14 funeral homes in Maine, resolves a five-year-old dispute that began when a Lewiston funeral home operator filed a complaint against the company.

Service Corp. International, which is a publicly traded company, owns funeral homes in Portland, Waterville, Belfast, Skowhegan, Farmington, Lewiston, Auburn, Yarmouth, Old Town, Rumford and Lisbon Falls.

The eight-page agreement requires Service Corp., which operates a Maine subsidiary called ECI Services of Maine, to stop offering what the state contended were commissions to employees who sell prepaid funerals.

The company acknowledged that employees were rewarded either financially or with incentives such as vacations, but maintained that the rewards did not amount to commissions, which are prohibited under Maine law.

The company also acknowledged that it allowed prepaid funds amounting to millions of dollars to be invested in the stock market if the funerals were purchased before Sept. 18, 1999.

Maine law was tightened at that time, but even before then the law said that prepaid funds were to be deposited in a Maine bank, trust company, credit union or savings institution. The law is designed to protect consumers from potential losses from speculative investments.

Joshua Slocum, a national advocate for funeral consumers, criticized the size of the fine, saying $7,250 is not much more than the average price of a funeral.

“The fine is pathetic, pitiful. It’s not even a slap on the wrist,” said Slocum, executive director of the nonprofit Funeral Consumers Alliance of South Burlington, Vt., which is suing Service Corp. International and other industry chains for allegedly fixing the price of caskets. “What is the incentive for them not to do this again with such a paltry fine?”

But the state’s first aim wasn’t to impose the highest possible fine, since extending the dispute would have allowed the contested business practices to continue, said Assistant Attorney General Judith Peters, who signed the agreement with ECI.

“The most important thing at this point was to get this behavior stopped,” Peters said.

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