CMA warns unregulated providers over comparisons with solicitors

CMA: Draft guidance

Unregulated providers of will writing and online divorce services should not make “misleading comparisons” with solicitors, the Competition and Markets Authority (CMA) has warned

The CMA also cautioned that it may be “difficult” for unregulated legal businesses to provide pre-paid probate services “at all without falling foul of the law”,

As part of its investigation into unregulated will writing, online divorce and pre-paid probate services, launched last July, the CMA is consulting on draft guidance to help providers “better understand and comply with their existing obligations” under UK consumer law.

In Unregulated legal services – guidance on consumer protection law, the draft guidance advises will-writing firms not to make “misleading comparisons” when marketing services, “for example by comparing the (higher) cost of a bespoke service provided by a solicitor with your (lower) cost, omitting the relevant fact that the higher cost reflects a very different service”.

Consumers should not be led to think that “by purchasing your service they are engaging a firm of solicitors or other regulated legal professionals on their behalf” if this was not the case, or the service was “otherwise benefitting from regulatory oversight”.

The CMA gave similar warnings to providers of unregulated online divorce services to avoid making “misleading comparisons with competing services where your service is not in fact comparable”.

This could be by “comparing the (lower) cost of a limited, generic online divorce service with the cost of engaging the advice of a specialist family solicitor”.

Consumers should not be encouraged to think that they were “engaging a firm of solicitors or other regulated legal professionals on their behalf if this is not actually the case”.

With will writing, the CMA warned in particular against using “pressure selling techniques (for example, staying in a consumer’s home after you have been asked to leave) which harass, coerce or unduly influence a consumer”.

A “particular concern” in the divorce sector was “the marketing of ‘online divorce’ services where the service consists of assistance with completing forms that are available to consumers online – in other words, purely administrative services”.

Pre-paid probate plans, meanwhile, “give rise to significant consumer protection risks”.

In particular, it was “difficult to predict in advance whether probate will be required, and the scope of the services required”. For example, the consumer’s estate might end up being too small for a grant of probate, meaning money spent on the plan “may be wasted”.

There was a further risk that the unregulated provider “may cease trading in the time between the consumer purchasing the plan and the consumer’s death”, which could be “years, or even decades” apart.

Businesses might also “present themselves as taking steps to protect consumers’ funds”, but “these may not be meaningful”.

The CMA said that “at the time of writing”, the codes of practice of two membership bodies for will writers and estate planners – the Society of Will Writers and the Best Foundation – banned members from offering pre-paid probate plans.

Meanwhile, the Society of Trust and Estate Practitioners (STEP) had argued that the “few advantages” of pre-paid probate plans were far outweighed by their risks.

The Financial Conduct Authority published a consumer warning on pre-paid probate plans in January 2023, highlighting the fact that the services providing them were unregulated.

Against this background and “the broad general prohibition on unfair commercial conduct in consumer protection law, it may be difficult for businesses to provide pre-paid probate services at all without falling foul of the law”.

The CMA intends to issue the final guidance later in the year.

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