CMA cautions will writing and legal service providers

This move comes amid concerns over misleading and unfair practices that could exploit consumers, especially during emotionally vulnerable times like divorce or preparing a will. Alongside these warnings, the CMA has launched new guidance aimed at ensuring that businesses comply with consumer protection laws.

With the rise of online legal services, many consumers now turn to these more affordable and accessible alternatives to traditional high street solicitors. However, the CMA's latest investigation reveals that some unregulated service providers are engaging in practices that may harm customers, including aggressive upselling, refusal of refunds, and failure to address complaints.

CMA’s Concerns and Actions

The CMA has issued formal letters to seven companies in this sector, urging them to acknowledge the warnings and take corrective action. Those businesses are expected to review their contract terms and business practices immediately, or they risk facing more severe consequences, such as formal investigations or enforcement actions. Hayley Fletcher, CMA's Interim Senior Director for Consumer Protection, commented on the situation, stating:

"Consumers rely on these services at some of the most difficult times in their lives. It’s crucial that they aren’t misled or taken advantage of when they are making life-changing decisions like writing a will or going through a divorce. The guidance we’re issuing today aims to make sure businesses get their house in order and that customers receive the fairness and transparency they deserve."

As these unregulated legal services are not purchased regularly, many consumers may be unaware of the costs involved or the alternatives available to them. This lack of familiarity makes it easier for unethical businesses to exploit clients by using unclear or aggressive sales tactics. The CMA has highlighted these practices as particularly troubling, warning that with stronger enforcement powers coming into effect from next spring, the businesses in question need to act now to avoid legal consequences.

New Guidance for Businesses

To address these concerns and raise compliance standards across the sector, the CMA has introduced detailed guidance aimed at businesses providing unregulated legal services. The guidance emphasises three main areas of concern:

1. Drafting fair terms and conditions: Businesses must ensure that their contracts are clear and transparent, providing consumers with enough information to make informed choices.

2. Providing services with reasonable care and skill: Service providers need to meet basic expectations of professionalism and competence, ensuring they don’t mislead clients or cut corners.

3. Using non-misleading and non-aggressive sales practices: Aggressive upselling, unclear pricing structures, or deceptive advertising must be avoided to ensure consumers are not manipulated.

Hayley Fletcher added, "We expect all businesses in this sector to take immediate action to comply with the law. If they don’t, they could face enforcement actions that may include significant penalties. This is an opportunity for the industry to build trust with its customers by being more transparent and fair."

The CMA's guidance was developed after a broad consultation process, which included feedback from consumer advocacy groups, trade associations, and legal service providers themselves. This collaborative effort ensures that the new regulations reflect the needs of both businesses and consumers while addressing the specific risks associated with unregulated services.

Sarah Manuel, Head of Professional Standards at STEP, the professional body for inheritance advisors went on to comment, 'We are pleased that the CMA has taken steps to protect consumers from poor practice within the will writing and legal service industry. We fully support their efforts to caution unregulated providers and introduce stronger enforcement powers. We also welcome advice to the public about what to consider when buying will writing services.

'Anyone can set themselves up as a will writer and bad advice can cause significant distress, leaving grieving families to deal with the financial and emotional consequences.We hear all too often from the public and our members about the financial and emotional impact of poor advice from dishonest,unqualified and incompetent will writers.

'In a survey of our members last year, 79% had come across wills with errors and 54% were aware of other firms making false claims, such as avoiding care home fees. We remain committed to ensuring that those drafting wills are appropriately qualified. STEPsets standards for our members who write wills, trusts and similar legal paperwork through ourqualifications, Will Code and other tools.

Risks of Pre-Paid Probate Services

One area of particular concern is pre-paid probate plans, which are often sold to individuals as a way to manage the costs associated with administering an estate after death. These plans typically involve paying upfront for services that will only be provided after the consumer’s death. However, the CMA warns that these services come with significant risks, including the possibility that the company may cease trading before the service is needed.

The CMA’s consumer guide specifically warns people to think carefully before purchasing these plans. Similar warnings have already been issued by the Financial Conduct Authority (FCA), which has noted the high potential for consumer harm if probate companies fail before delivering their services. Hayley Fletcher explained, "The risks with pre-paid probate services can be significant. Consumers must ensure they fully understand what they’re committing to and what happens if things go wrong."

Empowering Consumers

In addition to its guidance for businesses, the CMA has also published new consumer guides aimed at helping individuals make informed decisions when choosing will writers or divorce service providers. These guides highlight the importance of understanding the terms and fees associated with legal services and provide practical advice on what questions to ask before making a purchase.

The CMA has specifically tailored these guides to address the unique challenges consumers face when navigating unregulated legal services. For instance, many people do not realise that online divorce services can vary widely in cost and scope, with some offering only basic document filing and others providing more comprehensive legal support. The consumer guides are designed to clarify these differences and help individuals choose services that meet their specific needs.

"Consumers are often unaware of the full scope of services they’re purchasing," Hayley Fletcher said. "Our guides will empower them to ask the right questions, seek clarity on pricing, and ensure they’re getting a fair deal."

Sarah Manuel stated that 'We will continue to work with the CMA and other partners to help protect people from poor advice when they are often at their most vulnerable. We will also continue to push for regulation of the will writing industry alongside the provision of high-quality training and greater recognition of specialist will qualifications.'

Sector Monitoring and Future Actions

The CMA has made it clear that this is just the beginning of its efforts to regulate the growing unregulated legal services market. An open letter has been sent to providers across the sector, and the CMA will be closely monitoring compliance with the new guidance. In the coming months, the authority plans to conduct a formal compliance review to assess whether businesses have taken the necessary steps to align with consumer protection laws.

"We’re committed to protecting consumers in this rapidly changing market," Hayley Fletcher said. "We will continue to monitor the sector closely, and if we find businesses are not complying with the law, we won’t hesitate to take enforcement action."

Balancing Affordability and Protection

As more consumers turn to cost-effective alternatives for legal services, it is vital that they are not left vulnerable to unfair practices. While unregulated legal services can offer convenience and lower prices, they also pose unique risks. The CMA’s new guidance serves as a critical step in ensuring that businesses uphold high standards of transparency and fairness, while consumers are provided with the tools and information needed to make informed decisions.

In this evolving landscape, the CMA’s focus on protecting consumers aligns with broader efforts to bring more accountability and trust to the legal services market. By prioritising both affordability and protection, the CMA hopes to strike a balance that benefits both businesses and consumers in the long term.

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