Unregulated law firms: will writers and divorce and probate services asked to treat clients fairly
Will drafters and other legal services firms have been slapped with a warning against “misleading or aggressive” sales practices and threatened with an official investigation by the Competition and Markets Authority.
The watchdog issued guidelines to seven unnamed companies on how to treat customers fairly and openly published its letter to unregulated legal providers.
It warns companies against using “particularly concerning practices” when people are in some of the most difficult times of their lives.
The CMA is trying to root out bad behaviour, such as aggressive upselling, refusing refunds and failing to respond to complaints.
Their warning is directed at legal companies, including prepaid probate services, which come with a strict specific warning explained below, and those that offer online divorces as well as will writing.
Will’s writing services have become a cheap and increasingly popular alternative to traditional lawyers.
Some are reputable, adhere to codes of conduct, and have lawyers on payroll to ensure the job is done correctly; See the chart below on what to check before hiring one.
The CMA says it wants to protect the growing number of consumers opting for unregulated legal services.
“It is essential that they understand and comply with their consumer protection obligations,” he says. “People who buy these services need to be sure they are being treated fairly.”
The CMA adds: ‘Those who receive a letter should acknowledge it and act on recommendations to review and revise the terms and practices of their contract.
“With the CMA set to receive stronger enforcement powers from next spring, if concerns are not addressed, companies could face a formal investigation.”
The new Digital Markets, Competition and Consumer Act will allow the CMA to determine whether consumer law has been breached, impose fines and order companies to pay compensation to customers.
The watchdog has also published guidance for customers on the level of service they should expect from unregulated firms. writers and divorce service providers, and sources of help if something goes wrong.
Meanwhile, probate is the formal process of gaining control of an estate after someone has died.
The CMA says: “Consumers are warned to think carefully before purchasing prepaid will plans as they carry significant consumer protection risks, including the fact that the company could cease trading before the consumer’s death.”
And it points to a prior warning to the public about prepaid succession of the Financial Conduct Authority, which says: “We strongly recommend that you carefully consider whether these products meet your needs and offer value before purchasing them, as there are no regulatory protections for you.”
Sarah Manuel, director of professional standards at estates industry body STEP, welcomes the CMA’s move to protect consumers from bad practice in the will writing and legal services industry.
‘We fully support their efforts to warn unregulated providers and introduce stronger enforcement powers. We also welcome advice to the public on what to consider when purchasing will writing services.’
Manuel warns: ‘Anyone can set themselves up as a will writer and bad advice can cause great distress, leaving grieving families to bear the financial and emotional consequences.
‘All too often we hear from the public and our members about the financial and emotional impact of bad advice from dishonest, unqualified and incompetent will writers.’
He adds that in a STEP survey of members last year, 79 per cent had encountered wills with errors and 54 per cent knew other companies were making false claims, such as avoiding care home fees.
‘We remain committed to ensuring that will writers are suitably qualified.
‘STEP sets standards for our members drafting wills, trusts and similar legal paperwork through our qualifications, Will Code and other tools.’
Manuel says STEP will continue to push for regulation of the will writing industry alongside high-quality training and greater recognition of specialist qualifications.’
Michael Culver, president of the Association of Life Lawyers and head of Culver Law, also welcomes the CMA’s move but questions whether it goes far enough.
‘While many will writing firms, especially those of the Society of Will Writers, must meet similar standards to law firms, others do not.
No mention is made of the risks associated with DIY will kits, which can lead to costly legal problems and expose vulnerable people to fraud and abuse.
Michael Culver, president of the Association of Life Lawyers
‘These companies often make misleading claims about savings on care costs, inheritance tax and inheritance fees, with little consumer protection. The new guidance and greater enforcement powers are therefore a positive step.’
However, he adds: ‘Wills and durable powers are crucial legal documents, often drawn up in emotional moments or by vulnerable people.
‘It is time for these services to become a reserved legal activity, as in other jurisdictions, to better protect consumers.
“Furthermore, there is no mention of the risks associated with do-it-yourself will kits, which can lead to costly legal problems and expose vulnerable people to fraud and abuse.”
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