Funeral home’s disclosure in pursuit of a debt allowed under the Act

PIPEDA Case Summary #2006-355

[Principle 4.3; paragraph 7(3)(b)]

A family feud erupted when a funeral home director called the brother of the complainant to tell him that the bill for their father’s funeral remained unpaid. The complainant felt it was entirely inappropriate for the director to have done this as she had been the one who signed the service contract with the home, but the funeral home contended that the disclosure was allowed under the Personal Information Protection and Electronic Documents Act (the Act).

As the home had made numerous other attempts to obtain payment from the complainant, the Assistant Privacy Commissioner agreed that the home’s disclosure without consent was allowable under the Act. The following is an overview of the results of the investigation and the Assistant Commissioner’s deliberations.

Summary of Investigation

The complainant, her brother and his wife attended the funeral home to acquire funeral services for their late father. The complainant and her brother are co-executors of their father’s estate. The complainant and one of the funeral directors signed an “Authorization and Funeral Purchase Agreement” in the presence of the brother. According to the Agreement, the purchaser (the complainant) agreed to pay the balance within 30 days.

The complainant claimed that, at the time of signing the contract, she told the director that she would have to deal with the bank and the lawyer before her father’s estate could be settled. She also claimed to have said that she needed her father’s Canada Pension Plan (CPP) death benefit to pay for the funeral. The director, however, did not recall her mentioning any potential delays in paying for the service.

Shortly after the funeral, the complainant received a letter and invoice stating that payment was due in 30 days. The complainant told us that she was unable to make the payment at this point because her father’s estate was not yet settled. She did not, however, contact the funeral home to inform them of this.

About two months later, when it still had not received any payment, the funeral home sent the complainant a reminder that the account was past due. Although the reminder asked her to call or stop by the home to work out a payment plan, she neither contacted it nor paid the bill. She informed the Office that she never received this particular correspondence.

When two more months had passed and no payment had been received, the funeral home sent another letter and statement. The complainant’s file was then passed to another funeral director whose duties included following up with delinquent accounts. This director called the complainant about the matter and a tense conversation ensued.  According to the director’s notes from the conversation, the complainant said that she would be making a payment in a few weeks, she did not like the tone of his voice, and she did not receive the earlier letter. She then hung up on him.

The funeral home concluded that it was not going to get paid for some time, if at all, based on this conversation with the complainant. Before proceeding to court or a collection agency, the managing director spoke to another funeral director, who indicated that he knew the complainant’s brother and offered to speak to him regarding the payment problem. It was decided that this would be the approach to take before going to a collection agency, which would cause embarrassment for the family and affect the complainant’s credit rating.

After the complainant had hung up on the director, she spoke to the funeral director who had signed the original service agreement. This director told the Office that, during this conversation, the complainant indicated that the payment was coming and that things had been delayed. She did not inform the other directors of this conversation as she assumed that the payment would be forthcoming over the next few days.

The director called the complainant’s brother and informed him that the funeral home had attempted to contact the complainant to obtain payment for their father’s funeral and that the account was overdue. He told the brother that the complainant had not responded to the funeral home’s correspondence, that there had been no advancement in receiving any payment, and that when they spoke to the complainant, she had hung up on them. The brother had thought that the funeral bill had been paid and indicated that he would look into the matter.

We spoke to the brother about the incident. He indicated that he had trouble reaching the complainant, but that his wife eventually did. According to his wife, the complainant had stated that the bill had been paid and that the home had made an error.

The day after the call to the brother, the complainant faxed the home a note, apologizing for the delay and indicating that it was due to issues with her father’s death benefit and title of house. She promised to make a payment within a couple of days, but when she did not the home informed her in a voicemail message that if she did not pay, it would proceed to court.

On the same day, the brother spoke to the home and learned that the bill was still unpaid. He left the complainant a message stating that he was going to pay the bill, which he in turn did. After she received this message, the complainant went to the funeral home and paid the account. The home tore up her brother’s cheque. The complainant claimed that the entire matter resulted in a serious rift between her and her brother.

Findings

Issued October 19, 2006

Application: Principle 4.3 states that the knowledge and consent of the individual are required for the collection, use, or disclosure of personal information, except where inappropriate. Paragraph 7(3)(b) is an exception to this requirement for consent. It states that an organization may disclose personal information without the knowledge or consent of the individual only if the disclosure is for the purpose of collecting a debt owed by the individual to the organization.

In making her determinations, the Assistant Commissioner deliberated as follows:

• There was no dispute that the funeral home contacted the complainant’s brother about the account in question, without her knowledge or consent. In the complainant's view, it was entirely inappropriate for the Funeral Home to have done so since she had signed the contract, not him.
• According to the funeral home, it was unsure whether the complainant was going to pay the account and whether she was, in fact, the Executor of the estate. It contended that paragraph 7(3)(b) of the Act allowed it to disclose information as it was attempting to collect a debt that the complainant owed to it. The home also claimed that the brother, as a beneficiary to their father’s estate, was entitled to all information relative to the debts and assets of the estate, which included the fact that the funeral bill had not been paid. The Assistant Commissioner noted that the home, however, did not know this for certain when it made the disclosure to the brother, nor did it know if he was a co-executor.

• By signing the Agreement, the complainant agreed to pay the amount due within 30 days. She did not make any alternative arrangements with the funeral home regarding payment. When it did not receive money from her after 60 days, it sent her a letter, which the complainant claimed not to have received. The address on this letter was the same as that on the other correspondence sent to the complainant by the home, which she did receive. Whether this particular letter reached her or not, the complainant was still aware that she was late in making the payment but she did not contact the funeral home about the matter. The home then wrote to her again, this time 150 days after the initial invoice had been sent. When speaking to one of the funeral directors about this matter, the complainant claimed the money was forthcoming and then she hung up on him.
• The funeral home chose to try contacting the brother about the matter before going to court or a collection agency. Given that the brother was present when the funeral arrangements were made and the complainant signed the Agreement, the Assistant Commissioner considered it reasonable for the funeral home to have contacted him about the payment. As co-executor of the estate, the brother would have likely learned about this in any event, since he was also responsible for ensuring that funeral expenses were paid. The information disclosed to him was related to the outstanding funeral bill and the attempts to contact the complainant to obtain payment. In the Assistant Commissioner’s opinion, this information involved the collection of a debt that the complainant owed, and the disclosure without knowledge or consent was allowed under paragraph 7(3)(b).

Accordingly, the Assistant Commissioner concluded that the complaint was not well-founded.