In a significant move, the Competition and Markets Authority (CMA) has issued warnings to seven unregulated providers of wills and online divorce services. These providers have been alerted about their concerning practices, including “aggressive upselling,” refusal of refunds, and inadequate response to complaints.
The CMA’s intervention follows an investigation launched in July 2023 into unregulated will writing, online divorce, and pre-paid probate services. The investigation has prompted the CMA to issue new guidance for unregulated firms, urging them to review and amend their contract terms and practices.
The firms involved have been advised to acknowledge the CMA’s letter and implement the recommended changes. Failure to do so could result in formal investigations. An open letter from the CMA to the unregulated legal services sector highlighted concerns that some traders may not be adhering to consumer protection laws.
According to the CMA, businesses are obliged to ensure that their terms are fair and accessible, avoiding unfair price increments or hidden fees. They must also steer clear of provisions that unjustly limit or exclude liability, especially concerning subscription services like will storage.
The guidance emphasises the need for businesses to provide services with reasonable care and skill, avoiding aggressive sales tactics that contravene statutory obligations. The CMA has stated its ongoing commitment to monitor the sector, intending to conduct a compliance review to assess adherence to consumer laws governing wills, online divorce, and pre-paid probate services.
If businesses fail to align with the expected standards, the CMA has warned of potential enforcement actions. However, the CMA clarified that this scrutiny of unregulated providers does not imply they are inferior to their regulated counterparts.
The CMA also informed businesses that local authority trading standards services have the power to enforce consumer laws independently. Additionally, the Digital Markets, Competition and Consumers Act 2024 will enhance the CMA’s enforcement capabilities, enabling it to impose financial penalties for consumer law violations without court proceedings, effective from April 2025.
The guidance cautions against misleading comparisons with solicitors, urging unregulated firms to clearly disclose their status to consumers, ensuring transparency that they are not solicitors or regulated professionals.
Furthermore, the CMA has released new consumer guides to assist individuals in selecting appropriate will writers or divorce service providers. Hayley Fletcher, interim senior director for consumer protection at the CMA, noted the potential convenience and cost-effectiveness of alternatives to traditional law firms, particularly during difficult times.
Fletcher highlighted the importance of compliance with the law, emphasising that firms must read and act on the new guidelines to prevent making challenging situations even harder for consumers. She warned that non-compliance could lead to enforcement actions.
The CMA’s proactive approach underlines its commitment to safeguarding consumer interests in the legal services sector, urging unregulated firms to enhance practice standards in alignment with consumer protection laws.
