CMA launches draft guidelines for willwriting, online divorce and prepaid probate

The Competitions and Markets Authority have announced the first part of their response to the investigation into unregulated businesses which provide will writing, online divorce, and pre-paid probate services in the UK. In it the CMA outline its views on protecting consumers and warns firms that non-compliance could result in further penalties. 

Draft guidelines specifically for providers of unregulated legal service, including will writing, divorce and pre-paid probate, has been produced as part of its investigation with the CMA opening a consultation on its content which is says aims to

• ensure consumers have the information they need to make informed decisions;
• provide fair terms and conditions between providers of unregulated legal services and consumers
• stop sales practices which are misleading or aggressive; or otherwise contrary to statutory obligations.

The review was launched in July 2023 amidst concerns around compliance with consumer law, specifically raising issues related to misleading advertising offering low initial fees without indications of future costs;  the use of potentially unfair contract terms, such as exclusions of liability, failure to provide cancellation rights, and terms which automatically appoint the firm as executor (often for a fee); and reports of pressure selling and coercion of vulnerable customers.

The draft guidance is available to review on the gov.uk website and includes specific sections on will writing, divorce and pre-paid probate with a clear ‘do and don’t’ advice and checklists and case studies. The guidance clearly states that fees should be clear, including likely expenses or associated costs; state the business is unregulated; be clear about what work is completed in-house and what is outsourced to third parties; and ensure consumers are aware of professional qualifications held by consumer-facing individuals. The guidance states for example ‘if a consumer is speaking with a member of a marketing team, they should not be given the impression that individual is qualified to give them legal advice.’ 

Addressing the relationships between will writing firms and charities where free wills are offered, the CMA says ‘the fact that a business is not directly receiving payment for its service from consumers does not automatically remove it from the scope of consumer protection law.’

On pre-paid probate the CMA raises concerns about the ability to provide the service ‘at all without falling foul of the law’ and highlights the decision of membership bodies the Best Foundation, Institute of Professional Willwriters (IPW) the Society of Will Writers (SWW) to prohibit members from selling pre-paid probate through their respective codes of conduct as further evidence of the risks. Indeed STEP warns ‘the few advantages that pre-paid probate plans can offer are far outweighed by their risks.’

The CMA warns that once the guidance is finalised it will ‘conduct a compliance review to assess compliance levels across the sector. If the review shows that problems are continuing, the CMA will consider whether enforcement action may be necessary to raise compliance levels and protect consumers.’ It has also said that new legislation, in the form of the Digital Markets, Competition and Consumers (DMCC) Bill, will give the CMA additional enforcement powers and the ability to impose penalties where consumer protection law has been breached

The consultation, which opens today (30th April 2024) invites responses to a series of key questions on the spirit and intention of the guidance, including

• Does the draft guidance cover the most important consumer protection law issues relating to unregulated will writing, online divorce and pre-paid probate services? If not, what additional issues should the compliance guidance address and why?
• Is the draft guidance clear and helpful on the relevant legal principles and the issues of concern the CMA has identified? If not, how could it provide guidance on those principles and issues more clearly and helpfully?
• Are there any aspects of the draft guidance that you consider need further clarification or explanation, and why? In responding, please specify which section of the draft guidance (and, where appropriate, the issue) each of your comments relates to.
• Overall, is the draft guidance sufficiently clear and helpful for the intended audience? Is the language and terminology helpful? In particular, we are mindful that the majority of businesses in the unregulated legal services sector are small and medium enterprises (SMEs), many of which are micro-businesses.

Law Society of England and Wales president Nick Emmerson said:

“We welcome this consultation, as it investigates the potential risk consumers face from using unregulated services to write their wills. We share the concerns raised by the Competition and Markets Authority (CMA) about possible breaches of consumer protection law such as misleading advertising, pressure selling and coercion of vulnerable customers.

Although will-writing itself is not a regulated service, consumers face potential risks when using unregulated will writers or services. This may result in writing a will that is not legally valid. In this case, your estate will not be inherited exactly as you wish. Regulated will-writing offers peace of mind to both you and your loved ones.

When writing a will, we encourage consumers to use a solicitor, many of whom are members of the Law Society’s Wills and Inheritance Quality Scheme (WIQS). People who use this scheme receive support from a specialist legal professional who is regulated and insured. If choosing to write your own will, it is recommended that you get it checked by a solicitor to make sure it is valid. Consumers can use our “Find a Solicitor” tool when searching for a regulated legal service.”

The CMA has also indicated it is considering publishing a consumer advice document at the same time as the final compliance guidance. Organisations are invited to respond to the consultation, which will run to 5pm on 13 June 2024. Responses should be submitted by email to UnregulatedLegalServicesTeam@cma.gov.uk. The CMA say it plans to finalise the guidance later this year.