Marin shares $23M settlement in cremation lawsuit
The Neptune Society might owe some Marin residents a refund.
Service Corporation International (SCI), which does business in California as the Neptune Society and the Trident Society, has agreed to pay a $23 million civil penalty and to provide full restitution to clients who canceled their prepaid cremation plans but failed to get a full repayment.
The lawsuit was brought by state Attorney General Rob Bonta and prosecutors in Marin, Alameda and San Francisco counties. Each county will receive $5.75 million for the enforcement of consumer protection laws.
“Today’s settlement brings long overdue relief to the many concerned California consumers who purchased pre-need cremation products and services from the Neptune Society companies,” said Marin County Deputy District Attorney Andres Perez.
“Our action further sends a clear message to the funeral industry that California laws that protect customers of these products will be strictly enforced,” Perez said.
Beth Dombrowa, an SCI representative, wrote in an email, “Although we have strong defenses to the allegations made by the Attorney General, we have agreed to a settlement with no findings or admission of wrongdoing. We are settling the action to avoid the uncertainties and expense associated with continuing litigation and so that we can move forward with a full focus on serving families.”
The suit alleges that Texas-based SCI violated the state’s unfair competition law and false advertising law by engaging in false advertising and unlawful and deceptive acts in its marketing and sale of pre-need cremation packages.
Pre-need cremation packages provide a way for people to pay for their cremation services prior to their deaths. State law mandates that all money paid for pre-need funeral arrangements be placed in trust until either the beneficiary dies and services are provided, or the client cancels the contract. If a contract is canceled, the client is entitled to a full refund.
The lawsuit alleges that SCI deceived consumers about its trusting practices, refund policy, veterans’ burial benefits and cremation. For example, SCI allegedly told customers they had only 30 days to cancel their plans and receive a full refund. In actuality, customers are entitled to a full refund at any time before services are provided.
“Defendants’ scheme begins with a pricing model that steers nearly all customers to a product called the Standard Neptune Plan, a package of cremation services and merchandise,” the lawsuit said.
The suit states that the standard plan was priced to be cheaper than, or comparably priced to, standalone cremation services to induce consumers to purchase it. As of 2016, 99% of Neptune customers had chosen the standard plan.
Even though the standard plan includes both cremation services and merchandise — a memento chest with a photo frame lid, an urn, a plaque, thank-you cards, a planning guide and access to an online memorial — it was marketed and sold to customers as a single plan with a single price.
The suit states when it came time for consumers to sign up, however, SCI presented them with two contracts, one for the deeply discounted cremation services and one for heavily marked up merchandise.
“What they were doing,” Perez said, “is they were putting in trust only the amount attributable to services and not the amount for merchandise. When people asked for refunds, SCI was only refunding the amount for services and not the amount for merchandise.”
According to the suit, “SCI’s scheme has been extremely effective: to date, SCI appears to have wrongfully withheld over $100 million from the preneed trust.”
The suit alleges that SCI engaged in a number of additional unlawful and deceptive practices, including lying about owning and operating its own crematories, and offering installment payment plans that violate California law.
Perez said that anyone who purchased a standard plan between Oct. 26, 2014, and May 1, 2024, the date the settlement was recorded, may request a full refund. He said a settlement administrator will send notices to all customers with unfulfilled standard plans purchased during this period to notify them of their right to cancel and seek a refund.
Perez added that the settlement administrator will contact consumers who canceled previously and, based on SCI’s records, failed to receive a full refund.
“Those consumers,” he wrote in an email, “shall receive, without having to fill out any forms or return any merchandise, the difference between the amount the consumer paid for the Standard Plan and the amount previously refunded.”
John Grillo of Novato said he and his wife Mary recently purchased prepaid cremation plans from the Neptune Society. The Grillos have three children and wanted to ensure that their kids didn’t get stuck paying the bill for their cremations.
“We went to a little seminar that the Neptune Society had here,” Grillo said. “They gave you lunch and this and that.”
Grillo said he and wife paid for the plans in monthly installments and are now fully vested, but after reading about in the lawsuit he was a little worried.
“Hopefully, when I do leave this planet things will go smoothly,” Grillo said, “and Neptune will come through with what they said they were going to do.”
Service Corporation International, a public company that operates in 44 states and Canada, reported $4.1 billion in revenue in 2023.