Section 832IAC7-2-13. Unlawful inducement

   (a) "Inducement" means the act or process of a seller to entice or persuade a purchaser or potential purchaser to take a certain course of action with respect to a contract. An inducement can be tangible or intangible as well as direct or indirect.

  (b) "Unlawful inducement" means an inducement employed by a seller that is in violation of IC 30-2-13, IC 23-14-37, or these rules.

  (c) The advertisement of preneed services or merchandise to the general public does not constitute an unlawful inducement unless the advertisement is false or misleading or otherwise in violation of statute or these rules.

  (d) It is an unlawful inducement for a seller to knowingly induce a purchaser to breach an existing contract that provides for prepaid or at-need services or merchandise. It is not an unlawful inducement for a seller to advertise or otherwise inform consumers of their right to transfer their contracts to a successor seller.

  (e) A seller engages in an unlawful inducement where the seller knowingly:

(1) induces a purchaser who has the right to designate a successor seller under IC 30-2-13-13 to:

(A) make a designation of a successor seller;

(B) breach an existing contract for prepaid or at-need services or merchandise; or

(C) enter into a prepaid or at-need contract calling for the delivery of similar services or merchandise; or

(2) offers a monetary inducement or the exchange or substitution of free or discounted services or merchandise in an effort to induce a purchaser to change the designation of a seller of prepaid or at-need services or merchandise.

  (f) An unlawful inducement occurs where a seller provides free or discounted burial rights as:

(1) an inducement or as a consideration for the transfer of a contract; or

(2) an inducement of a purchaser to change the designation of a seller of prepaid or at-need services or merchandise.

  (g) In addition to section 9 of this rule, a seller engages in an unlawful inducement where the seller, as inducement to purchase burial rights in a cemetery or as inducement to purchase preneed or at-need services or merchandise, does any of the following:

(1) Offers, promises, or agrees to resell or repurchase the burial rights.

(2) Pays or offers to pay any sum of money as interest or as a premium for the right to resell or repurchase the burial rights.

(3) Allows a purchaser to convert, substitute, or exchange the purchase of burial rights for the purchase of services or merchandise.

(4) Offers or provides a purchaser with free services or merchandise in exchange for the purchase of other services or merchandise.

(5) Offers or provides a purchaser with cash or gifts with a value of more than fifty dollars ($50) as inducement to purchase a contract for services or merchandise.

  (h) A cemetery owner is not prohibited by subsection (g) from offering or agreeing to repurchase burial rights under a lot exchange plan that:

(1) is entered into with other cemetery owners or through an association of cemetery owners; and

(2) provides for the repurchase of burial rights in case the purchaser should change legal residence to another community and purchases burial rights in a cemetery located in the community of the purchaser's new place of residence.

  (i) A seller is not prohibited from offering or providing cash or gifts of a value less than fifty dollars ($50) as inducements to potential purchasers or new customers as part of the advertisement of goods and services.

  (j) Any reference to a seller includes an agent of the seller. (State Board of Funeral and Cemetery Service; 832 IAC 7-2-13; filed Mar 11, 2013, 2:50 p.m.: 20130410-IR-832120198FRA; readopted filed Nov 25, 2013, 9:23 a.m.: 20131225-IR-832130288RFA)

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