CMA sounds alarm on will writing and pre-paid probate

Will writing and pre-paid probate are the focus of a new review into unregulated legal services, the Competition and Markets Authority (CMA) has announced.

The review comes amidst concerns that not all providers are complying with consumer protection law.

The CMA noted that “customers now have many alternatives to the conventional law firms on the high street”, especially for unreserved legal services.

“Alternative providers very often offer services that are innovative and convenient for consumers, and that can be cheaper too. But where they are unregulated, it becomes all the more important that normal consumer protection laws are complied with and, if necessary, enforced,” they added.

The competition regulator said initial research has identified three main areas of concern involving potential risk to customers and possible breaches of consumer protection law: will writing, pre-paid probate, and online divorce.

Concerns around will writing include:

• Consumers being misled by advertising which offers an extremely low initial fee for advice but does not indicate that final costs can increase significantly
• 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)
• Reports of pressure selling and coercion of vulnerable customers

Regarding pre-paid probate, the regulator highlighted four concerns:

• Pressure selling techniques being used on elderly and other vulnerable people
• Lack of transparency about what costs are covered
• Plans that are unnecessary or fail to serve their purpose, leading to delays in the probate process and bereaved relatives being left unable to settle bills or sell property
• Lack of customer awareness that their money may not be adequately protected, even if held in trust

The CMA is also concerned that, if a company ceases to operate, there is a risk that customers’ money or important documents, such as their will, may be lost.

“These services are essential to people, often at the most challenging times in their lives. The CMA is aware that rising living costs mean people are watching their spending, so shopping around for a more affordable option is attractive and sometimes a necessity,” said Sarah Cardell, Chief Executive of the CMA, adding:

“These may not be frequent purchases, but they are life-changing. That’s why it’s so important that we investigate so that people can select the right legal service for them – for divorce or probate or will-writing – with confidence. It’s essential that firms get the basics right, including complying with general consumer law which applies to all traders. Customers must get a fair deal.”

Any interested parties, like consumer advocates, professional bodies, trade associations or any consumers with experience of using someone who is not a solicitor to provide a will, online divorce service or pre-paid probate plan can send their responses to UnregulatedLegalServicesTeam@cma.gov.uk by 4th September 2023.

Industry reaction

“We welcome this investigation into the potential risk consumers face from using unregulated legal services and possible breaches of consumer protection law,” said Law Society president Lubna Shuja, adding:

“When writing a Will, we would encourage consumers to use a solicitors’ firm, many of whom are members of the Law Society’s Wills and Inheritance Quality Scheme (WIQS). People who use a solicitor receive support from a specialist legal professional who is regulated and insured.”

This sentiment was echoed by Ian Bond, Partner, Irwin Mitchell, who also sits on the Law Society’s Wills and Equity Committee:

“I welcome the review […] Consumers in these markets are often not equipped with the right information before they make purchasing decisions – which often come at critical points in their lives – getting expert advice from solicitors who offer exceptional service to clients as a consequence of rigorous training and years of experience is key to a competitive legal market and can only increase consumers’ confidence and engagement in the legal services market.”

Bond did, however, add that the CMA must be mindful that “there are and will always be good unregulated advisers out there, and the detriment to the consumer tends to come from a handful of unregulated or inexperienced advisors”:

“Solicitors will also always have insurance to protect clients if mistakes are made, which unregulated advisers often don’t. The CMA will have to balance the needs of the consumers to access a wide range of providers, at a wide range of fees but giving them the public enough legal education for the consumer to decide which level of service it wants, but protecting from the harm that the minority unregulated advisers and products can bring.”

Trevor Worth, Managing Director and Founder of Portcullis Legals, former Chair of the Best Foundation, and last year’s Industry Champion at the British Wills and Probate Awards also welcomed the review:

“Despite many professionals in estate planning being of the highest standard there is still the question of allowing individuals and firms being able to advise clients despite having zero qualifications, zero background checks on whether they are fit and proper and zero insurance in place when it all goes wrong

Business advice generally is don’t get into a sector if the barrier to entry is too low as it can attract the unethical and the race to the bottom mentality. Unfortunately, will writing has a zero barrier to entry and individuals and firms are unaccountable and in many cases hiding behind someone else’s hard earned qualifications. The word legal or lawyer is used far too easily in marketing or brand names to bamboozle the public into thinking they are dealing with credible legal entities.”

Worth added that the profession “[must] become a profession”:

“We must all come together in the sector and insist on real external qualifications, CPD and background checks to ensure protection and redress for the clients as the CMA clearly have something to go on. Greater transparency and integrity will drive the sector forward as a real business or career pathway for a new generation of professionals and not those looking to make a fast buck.”

Claire Davis, director of Solicitors for the Elderly (SFE), said the organisation was “pleased” with the review having long held concerns:

“With will writers in particular, and where these companies branch out to creation of trusts, we are contacted by consumers who have been misled, overcharged, appointed the company as executors, and to a certain extent, coerced through a total lack of understanding about what they are doing. In addition, many of these documents are simply wrong and need our members to help put them right.”

Sue Ioannou, Chair of The Institute of Professional Willwriters backed Worth’s call for higher standards:

“IPW has been campaigning for many years to improve the supply of Willwriting Services and have been at the forefront of lobbying the government in this respect. As a result, we have implemented many things to ensure that our members are trained and operate to the highest standards. Therefore we would welcome any genuine investigation into services that are below par and we would also recommend a level of regulation and recognition for the work that we have done to protect the consumer.

The CTSI Consumer Code that IPW Members adhere to is probably the best Code that Willwriters can sign up to without actually being formally regulated. Part of that Code is that none of our members should be involved in providing services that they are not qualified to supply e.g. regulated services PLUS we do not advocate pre-paid probate plans. These schemes have many downfalls, such as, probate may not be required, plus the company that sold the plan may go out of business leaving the family high and dry.”

Anthony Belcher, Director General, Society of Will Writers said:

“In such great volume SWW Members provide a direct alternative to regulated services that for almost 30 years have been meeting consumers needs. Members are trained, insured, and adhere to a strict Code of Practice to ensure that their clients receive the best possible service that meet the standards that we expect. In addition, the SWW has introduced many other supporting mechanisms for both professionals and consumers over the years, such as our bespoke technical advice and Public Indemnity Fund, and as an organisation we continue to champion our members’ efforts with the likes of government, regulators and other key industry stakeholders.

The SWW has specifically outlawed the introduction and sale of pre-paid probate plans, something which is written directly into its Code. We welcome meaningful investigations into the unregulated sector and continue to be involved in such to ensure that our members’ voices are heard, their needs and concerns are met and above all, they receive the recognition they deserve for the excellent work they do.”

Sarah Manuel, Head of Professional Standards at STEP, said:

“STEP […] sets standards for will writing through our Will Code and qualifications. Our members tell us that they regularly support grieving families whose loved ones have previously been given bad advice that can be financially and emotionally devastating.

We therefore fully support the CMA’s investigation into will writing, because it should help raise standards and give consumers greater protection. We also support the CMA’s investigation into pre-probate payments. It should help protect consumers from bad advice, as prepaid probate is not something we would expect our members to be advising their clients to pay.

STEP supports regulation of will writing. In the absence of government support for it, consumers need better education about how to choose a suitably qualified and trained advisor.”