The California attorney general filed a lawsuit earlier this month against the Neptune Society, alleging $100 million was “swindled” from customers who prepaid for cremations.
California Attorney General Xavier Becerra and three Bay Area prosecutors claim that the Neptune Society and its subsidiary Trident Society broke state laws by failing to hold more than $100 million in a fully refundable trust for customers who signed up for prepaid cremation services.
The lawsuit alleges that the Neptune Society should have kept the money in reserve for prepaid cremation customers.
“As a result, many of the company’s customers failed to get full refunds if they canceled their contracts, and thousands of other prepaid customers could also lose their money if they cancel,” said a recent story in the Los Angeles Times.
The story reported that the well-known company also falsely claimed to use its own crematoriums when in fact it contracted with others and illegally accelerated payments when customers died, among other misleading business practices.
The company is “swindling customers who were simply trying to look out for their families and prepare for one of life’s most difficult moments,” the attorney general said in a statement.
Beth Dombrowa, a spokeswoman for Neptune and its parent company, Texas-based Service Corp. International, said she could not immediately comment, the L.A. Times reported.
The lawsuit claims that “the Service Corporation International subsidiaries deceive purchasers of a standard package of cremation and merchandise, typically costing $2,500, by leading them to believe that all of their money is refundable.”
The suit alleges Neptune steered 99% of customers to its Standard Neptune Plan, which included both cremation services and related funeral services “products” but then illegally kept about half the money because it was earmarked for products
Neptune thus deceived consumers who thought all their money was protected, as required by California law, the lawsuit claims.
“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,” Marin County Dist. Atty. Lori Frugoli said in a statement, the L.A. Times reported.
Service Corp. International and its subsidiaries are North America’s largest provider of funeral, cremation and cemetery services, including in the Metro Vancouver area.
The lawsuit noted that nearly two-thirds of people in California choose to be cremated, with many choosing to prepay for those services through companies such as Neptune.
The suit seeks civil fines and court orders requiring Neptune and Trident to put the full amount of money collected in the past into trusts and to stop the allegedly deceptive practices.
Neptune Society was established in 1973 in Florida and was purchased by SCI in 2011. It is known as Trident Society in six California locations.
At Sept. 30, of this year, Service Corp. International says it owns and operates 1,477 funeral service locations and 483 cemeteries in 44 states, eight Canadian provinces and Puerto Rico. It markets its services under the “Dignity” brand.
SCI was founded in 1962 by Robert L. Waltrip, a licensed funeral director who grew up in his family’s funeral business; he still serves as chairman of SCI’s board of directors.
Both SCI and Neptune Society have faced numerous lawsuits in the past.
In 1988, Neptune Society reached a $32-million settlement involving 5,000 plaintiffs who claimed the cremated remains of their deceased relatives were “unceremoniously dumped” in the Sierra Nevada foothills.
In 2014, SCI and its Eden Memorial Park cemetery in California reached an $80.5 million out-of-court settlement with families who claimed the cemetery disturbed the remains of loved ones to fit more deceased in graves.
SCI also reached a $100-million settlement in 2003 involving a class-action filed by families who claimed the remains of their loved ones had been desecrated at two Menorah Gardens cemeteries in Florida.