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East County News ServiceDecember 7, 2019 (San Francisco) -- California Attorney General Xavier Becerra, along with the District Attorneys for the City and County of San Francisco, Alameda County, and Marin County, filed a lawsuit yesterday in Alameda County Superior Court against Texas-based Service Corporation International and its subsidiaries doing business as Neptune Society.
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. 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.”
California law requires companies selling pre-need funeral plans to hold customers’ payments in a fully refundable pre-need trust until the service is provided. The complaint alleges that instead, Neptune illegally kept more than $100 million that should have been placed into trust.
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, the complaint alleges. Thousands of the company’s other California prepaid customers could face the same consequence.
In addition, 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, according to the suit, which also accuses the company of failing to provide legally-required disclosures on mailers which advertised seminars on veterans’ benefits..
In a statement, Neptune’s Texas-based parent company, Service Corporation International, said the society has passed regular inspections and annual audits and is in full compliance with state and federal law.
The corporation called the attorney general’s claims a gross misinterpretation of the law that contradicts the AG’s own past opinion on the legality of Neptune’s business practices, KTLA reports. The statement said Neptune had filed a complaint seeking a court “declaration of its rights.”
A copy of the complaint can be found here.
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