Business ProfileforService Corporation International

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the government's allegations, which have not yet been proven.

As of December 2, 2019, the California Attorney General, in and For the County of Alameda, Case# RG 19045103, to wit;

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.

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 mis-allocating 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.

For further information please contact:
Attorney General's Office
California Department of Justice
Attn: Public Inquiry Unit
P.O. Box 944255
Sacramento, CA 94244-2550
Public Inquiry Unit
Voice: (916) 210-6276 or
(Toll-free in California)
(800) 952-5225
Fax: (916) 323-5341

Link:
https://oag.ca.gov/news/press-releases/attorney-general-becerra-files-unlawful-business-practices-action-against

In response to these charges, the business provided the following statement:

"Neptune filed a complaint on November 21, 2019 seeking a declaration of its rights from a court of competent jurisdiction in response to the Attorney General of the State of California's current claims, which are a gross misinterpretation of the law and inconsistent with the manner in which the State of California has regulated licensed funeral establishments since the current preneed trusting laws were enacted in 1965. The Attorney General's complaint is also in direct contradiction of its past written opinion on the legality of Neptune's business practices and is contradictory with the results of the regular inspections and annual audits conducted by the California Department of Consumer Affairs (DCA) Cemetery Funeral Bureau, which has never once challenged the legality or impropriety of Neptune's business operations in this manner. All of our locations are licensed in good standing with the DCA and operate in full compliance with all state and federal laws. While Neptune has attempted to resolve this matter amicably with the State, it can no longer abide by Attorney General's misguided and conflicting interpretations of the law and had no choice but to seek judicial intervention."