The Competition and Markets Authority (CMA) is investigating firms offering Will-writing and probate planning following complaints some are not complying with consumer protection law.
Research by the CMA has identified the services as an area of concern involving potential risk to customers.
In terms of Will-writing, the watchdog is concerned about:
- 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); and
- reports of pressure selling and coercion of vulnerable customers.
The CMA is also looking into pre-paid probate plans, as concerns include:
- 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; and
- lack of customer awareness that their money may not be adequately protected, even if held in trust.
Sarah Cardell, chief executive of the CMA, said: “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.
“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.”
Sarah Coles, head of personal finance at Hargreaves Lansdown, added: “Online legal services have opened up cost-effective and efficient routes to get help with some of the toughest legal challenges we face. However, unfortunately, they’ve also flung the door open to unscrupulous rip off firms, which could leave us far worse off. The CMA has found some worrying practices and opened a consultation to explore how to better protect people.
“Many of the services that we traditionally ask a solicitor for help with can actually be done by anyone – like divorce, Will- writing and probate. It means that technically we can tackle it alone, and if we want a bit of help without the cost of a lawyer, we can go to an unregulated adviser. There are some innovative and effective firms operating in this area, however, unfortunately, there are also some rip-off companies too.”
Statutory legacy sum increase
In other news, the UK government has confirmed that the statutory legacy fixed net sum will increase to £322,000 ($413,523, €374,013) from £270,000 on 26 July 2023.
The statutory legacy sum is the amount, set by the UK government, to which the surviving spouse or civil partner of a person who dies intestate, but with children, is entitled to first from the estate before the remainder is shared.
Ian Bond, lifestyle and estate planning partner at Irwin Mitchell, said: “Where a person dies in England and Wales without a valid Will in place then, under the rules of intestacy, the estate of the deceased is distributed in a specific way depending on who survives, how they are related to the deceased and how many individuals there are.
“The order of priority for who inherits is: spouse or civil partner, children, parents, siblings, grandparents, aunts/uncles. The rules tend not to take into account modern relationships and make no provisions for co-habitees, step-children, friends, or favoured charities. This is good news for people struggling with the cost of living crisis and rising inflation.”
