SAN FRANCISCO – California Attorney General Xavier Becerra today, along with the District Attorneys for the City and County of San Francisco, Alameda County, and Marin County, filed a lawsuit in Alameda County Superior Court against Texas-based Service Corporation International and its subsidiaries doing business as Neptune Society (Neptune). The lawsuit alleges that Neptune — a company offering pre-need cremation service plans for purchase prior to a customer’s death — engaged in unlawful business practices and systematic misconduct in connection with the marketing and sale of those plans. The lawsuit includes allegations that the company broke California law by failing to hold in trust for the benefit of its customers a substantial portion of the money they paid for these plans and that it misled customers concerning this illegal practice.
“We charge Neptune Society with swindling customers who were simply trying to look out for their families and prepare for one of life's most difficult moments,” said Attorney General Becerra. “Neptune misled these customers and failed to honor its legal obligation. We won’t fail to honor ours. We will hold Neptune accountable, because no one should have to worry about scams when preparing for one’s own death or that of a loved one.”
“When planning for something so personal and emotional as post-death arrangements, consumers should expect that their money is protected and will be there when it’s needed,” said Alameda County District Attorney Nancy O’Malley. “My office remains steadfast in our commitment to protect the public from these types of unlawful business practices.”
“Consumers should expect the money paid toward future funeral needs will be fully protected and available to pay for the necessary services when the need ultimately arises so family and loved ones are not further burdened,” said Marin County District Attorney Lori Frugoli.
“No one making funeral arrangements for a loved one should have to worry about being cheated,” said Interim San Francisco District Attorney Suzy Loftus. “We have teamed up with the California Attorney General and neighboring DA’s offices to ensure that all consumers in our state are protected from being misled and manipulated when purchasing funeral services.”
California law requires companies selling pre-need funeral plans to hold their customers’ payments in a fully refundable pre-need trust until the service is provided. The complaint alleges that, instead of honoring this requirement, Neptune illegally kept more than $100 million that should have been placed into trust. Neptune did this by steering customers into a plan that bundled cremation services and merchandise, and it then illegally pocketed the money it allocated to merchandise. Neptune deceived consumers regarding whether amounts paid for the plan would be held in trust, as required by California law.
Because of the alleged practice of misallocating funds and the contract manipulation, many of Neptune’s customers failed to receive the full refund to which they were entitled when cancelling their contracts. Thousands of the company’s other California prepaid customers could face the same consequence.
In addition to allegations relating to its misleading bundling plan, the lawsuit alleges that Neptune falsely claimed to use its own crematoriums when in fact it contracted with others. The company also included illegal terms in installment contracts that accelerated payments when customers died and forced customers in California to file lawsuits against Neptune in Florida. Finally, the company failed to provide legally-required disclosures on mailers which advertised seminars that purported to provide information concerning veterans benefits. California law requires these disclosures to ensure that veterans are not misled about their rights.
A copy of the complaint can be found here.