The nation's largest funeral and cremation services company is facing a putative class action lawsuit in the Southern District of Florida that raises novel questions about sales practices around prepaid cremations that allegedly flout a state law designed to protect senior citizens from exploitation.

Named plaintiff Nancy Taylor in West Palm Beach alleges six companies owned by Service Corp. International and 20 John Does used a "bookkeeping sleight of hand" to trick her and countless others into prepaying in a way that maximized cash flow and infringed on consumer rights.

These prepaid services enable customers to pay for their funeral and cremation services ahead of time to lock in current costs and avoid stress for family members after their death.

Under Florida law, the defendant must put at least 70% of the money customers prepaid for cremation services into a trust fund and customers are entitled to full refunds, according to the complaint. That way, if a company goes out of business, moves out of town or if a customer changes their mind, there's protection.

But the complaint alleges Service Corp. split its plan into two different contracts, "heavily discounting" cremation and funeral services but "vastly overcharging" for such merchandise as urns, flowers and guest books. As a result, plaintiff Taylor claims she was only offered a refund for the discounted services and not for the merchandise, and alleges Service Corp. only had put about 50% of what it should have put into a trust.

Chicago attorney Randall Ewing Jr. of Korein Tillery is handling the lawsuit with Leon Cosgrove attorneys Alec Schultz, Jeremy Kahn and John Byrne in Coral Gables.

They allege the company has done more than just make use of a legal loophole, and instead used a classic bait-and-switch scheme.

"They [the defendants] essentially box you into a situation that discourages you from exercising your statutory right to cancel the contract, or move it to another provider," Ewing said.

The defendants have not yet retained counsel, according to online case files, and did not immediately respond to a request for comment.

Though discovery is yet to begin, the plaintiff team estimates thousands or tens of thousands of people could have been affected by the alleged scheme.

The complaint claims that anyone who purchased this package paid $1,200 more than they should have. And because most of the alleged victims are senior citizens, Taylor's complaint claims the defendant should also be on the hook for enhanced civil penalties of up to $15,000 per violation.

Ewing said it was exactly this alleged behavior that the Florida Legislature had hoped to curb when it drafted provisions around preneed funeral and cremation services.

"In light of current events, it is more important than ever that providers of cremation services and other end-of-life services not exploit senior citizens or others, and that Florida laws protecting consumers' money, ensuring adequate portability of services among providers, and allowing for cancellation and refund of prepaid cremation services be enforced as intended, and not subverted through deceptive sales and accounting practices," Ewing said.

It's not the first time Service Corp. has run into legal trouble.

California Attorney General Xavier Becerra brought a similar lawsuit against the company in December, alleging the company's sales practices underfunded its trust fund by about $100 million.

Dozens of families sued Service Corp. in 2012 over allegations that two of its South Florida cemeteries improperly buried bodies and mishandled remains. The case resolved with a $100 million settlement.

U.S. District Judge Rodolfo Ruiz will preside over the case in the Southern District of Florida.

|

Read the complaint:

Read more: