TEXT OF STORY
Bill Radke: One way Americans have been trying to save money is by paying for their funerals ahead of time. Consumers have put billions into trust funds that lock in today’s prices for burial or cremation, and the money also earns interest. In California, though, regulators have found problems with the way managers have handled the money in of one of the state’s largest funeral trusts. Reporter April Dembosky has our story.
April Dembosky: There’s about $65 million is the funeral fund known as the California Master Trust. State auditors found that managers spent some of that money on lobbying and conventions. They also paid themselves illegal administrative fees and gave kickbacks to funeral homes.
Russ Heimerich is a spokesman for the state’s Department of Consumer Affairs. He says the lost money could impact consumers’ funeral bills.
Russ Heimerich: If I put $3,000 in trust expecting it to grow to cover the cost of a funeral when I die, because a lot of the money was not used correctly, a lot of the interest income was taken away that should not have been.
The case in California is just the latest instance of mis-spending. Josh Slocum is the director of the Funeral Consumers Alliance, a nationwide advocacy group. He says a lack of oversight and regulation creates problems all over the country.
Josh Slocum: Every week there’s at least one more case of pre-need theft. $50,000 here in Kentucky, or $100,000 here in Michigan. They come in with surprising regularity.
Managers of the California trust did not return phone calls. But they are required to submit a report for corrective action to the state in August.
I’m April Dembosky for Marketplace.
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