Which of the following indicates that a cemetery operation is fraudulent in their endowment care representation?

Claiming perpetual care without legal backing clearly indicates that a cemetery operation is likely engaging in fraudulent practices. Perpetual care implies that the cemetery will maintain the grave sites and surrounding areas indefinitely, ensuring that they remain clean and well-kept. For a cemetery to make such a claim legitimately, there must be a legal and formal structure in place—typically backed by state regulations—to ensure funds are allocated appropriately for ongoing care.

Without this legal backing, the cemetery’s assertions about perpetual care can be misleading, potentially leading families to believe they will receive a level of service that the cemetery is not financially or legally obligated to provide. This misrepresentation can be damaging to consumers, who trust that they are making informed decisions regarding the care of their loved ones' final resting places.

Other options present different issues but do not directly point to the same level of fraudulent activity. The description of services as temporary or using an unclear fund structure can indicate poor practices or lack of transparency but does not inherently imply fraud. Offering discounts on pre-need arrangements might raise ethical questions but does not necessarily indicate fraud regarding endowment care claims.