When is it reasonable to charge vulnerable customers a penalty fee, for an action they haven’t even take yet? That is the question that funeral giant InvoCare was asked to answer, in light of a report released by consumer champion CHOICE – who has been highly critical of the corporation in recent times.
In the investigation report from November 2019, CHOICE slammed InvoCare, which owns brands including White Lady Funerals and Simplicity, for applying a late fee – before the customer was even due to pay – under the guise of an administration fee. Following the scrutiny, InvoCare says it has since reviewed its process and removed the administration fee from its invoices.
According to the CHOICE report, a $352 charge had been noted on all invoices from InvoCare’s brands as an administration fee, which was then deducted from the total invoice if the customer paid their bill within the 21-day limit. The biggest concern raised was the hidden nature of the fee, particularly given the vulnerability of the customer.
CHOICE campaign director Erin Turner described the practice as “absolutely disgraceful”.
“Many Australians would see the administration fee and not realise that it’s actually a late payment fee, particularly when they have just lost a loved one,” she said at the time.
CHOICE was tipped off on the practice by a funeral industry insider, who called it a “complete gouge of customers” in an anonymous quote cited by the consumer body. It made a complaint to the Australian Competition and Consumer Commission (ACCC) about the way InvoCare portrayed the fee.
“The description is misleading because the fee does not cover any type of service and therefore operates as a pre-emptive penalty,” the ACCC complaint submitted by CHOICE read. “For this reason, it is essential an unfair contract term.”
At the time of the report, Bare Cremation spoke to a former employee of InvoCare, who also wished to remain nameless, who said the intention of the fee was clearly understood.
“We all knew what was going on,” they said. “I would try and tell my personal customers to ensure they asked for an amended invoice if they were able to pay on time, but that was not the broader company policy.”
InvoCare, however, strongly rejected any suggestion it sought to take advantage of grieving families.
“We made it clear to CHOICE that the administration fee is discussed with the families at the time of the funeral arrangement and identified and clearly explained in the Funeral Services Agreement provided to the family and again shown on the final invoice,” the company said in a statement provided to Starts at 60 at the time.
InvoCare was met with widespread criticism from industry participants, consumer protection organisations and families impacted by the practice.
In a statement to Bare Cremation on June 2, 2020, an InvoCare spokesperson said “there may have been some confusion relating to how the administration fee was applied to invoices”.
“A thorough review of our processes was undertaken, including the use of the administration fee. To avoid any potential confusion about the administration fee, InvoCare removed the administration fee from its invoices earlier this year,” InvoCare added.
Following news of the November 2019 CHOICE report, Cale Donovan, co-founder of Bare Cremation, had been contacted by various publications for comment.
“The analogy I can make is that it’s like paying a speeding fine before you’ve even gotten in your car, only to be refunded when you complete your journey,” he said at the time. “Charging a pre-emptive late fee and labelling it as an administration is bizarre at best, and predatory at worst.
“All Australians, particularly when they’re grieving, should be provided an affordable and transparent funeral service. This opaque pricing and overcharging is exactly this reason that we started Bare.”
At Bare, we encourage everyone to be thoughtful in their choice of funeral director. There are many great ones out there, but do your research and ensure they are transparent and honest in the prices they provide.
For a fully transparent funeral arrangement, visit the Bare Cremation website here, or call 1800 071 176.