In 2009, to settle a state investigation into its business practices, Neptune Society entered into a consent decree with the state Division of Insurance that prohibited it from packaging pre-need cremation services with an urn and other merchandise. The decree was designed to make sure consumers have a choice.
A former salesman brought the business practices to the attention of CALL7 Investigators who decided to use hidden cameras to determine if the company is still using the sales pitch that did not comply with the state agreement.But the hidden cameras caught a Neptune saleswoman telling a producer that the company would not split the roughly $1,800 package into separate parts. The cremation costs about $1000 and the company charges about $700 for the urn and other items.
“So If I sign up, they send this stuff now?” a CALL7 Investigator asked.
“They are going to, yep,” the saleswoman said.
“Is there any way you guys hold on to it until it’s ready?” CALL7 Investigator asked.
“Unfortunately not,” the saleswoman said.
The state requires Neptune Society to put money into trust for anything they are providing to consumers in the future and if the organization held the urn the Society would have to put more money into trust. The trust is set up to make sure the services and items are available if the Society went out of business. But the company agreed with the state's demand to offer three options.
"If Neptune includes an urn as part of any package of services and merchandise that it markets and sells to Colorado consumers, a consumer will be give three options regarding the urn and other merchandise," the consent decree says. Those options allow the consumer to purchase and take delivery at the time of purchase, take delivery at the time the person dies or decline purchasing the merchandise.
But the saleswoman said Neptune does not offer three options.
“This is our cost of getting business done,” the saleswoman said. “So that's why I can’t pull it out, (because) this is the cost of getting business done.”
“So that's your profit that's what you are saying?” asked a CALL7 Investigator.
“Exactly,” the saleswoman said.
The Neptune Society declined an on-camera interview but in a written statement said they do not tell salespeople to package all the options together. “I think it is important to note that the general incident you described is contrary to and inconsistent with our policies and related training materials,” the statement said.
But a sales video obtained by 7News never instructs the sales people to separate the options.
“Once all the paperwork is completed and signed, you can move into the discussion of the delivery of the merchandise,” the narrator on the video said.
The Neptune former salesman said he was instructed to sell the items as a package. After he approached 7News, CALL7 Investigators decided to use hidden cameras to determine if the company is still using the sales pitch that did not comply with the state agreement.
“My experience is the company is still skirting the law, and they are still misleading the consumers," said the former employee who was fired after asking his supervisors why the Society was not following the consent decree.
“If I just wanted to purchase the cremation, you wouldn't do the deal?” Kovaleski asked the former employee.
“Absolutely not,” he said.
And the saleswoman in our hidden-camera video appears to closely follow the sales materials in her pitch.
A mortuary science expert who reviewed the entire pitch captured by hidden cameras said the company is violating the decree.
“By law you have to separate the two," said Martha Thayer. “When they see this, their hand is going to be forced to do something. This is proof.”
Paula Sisneros, director of compliance at the Colorado Division of Insurance, said her office will look into what our hidden cameras found.
"I certainly think Colorado consumers should be offered the choices, offered the choices that we required Neptune Society to offer them,” she said. "Our investigators will consider all the evidence brought to us to make sure Neptune Society is in compliance with the agreement they signed with us."
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