The Competition and Markets Authority (CMA) has recently issued new guidance aimed at protecting consumers who seek legal services outside of traditional high street solicitors, such as will writing, online divorce services, and pre-paid probate plans.
With more people turning to unregulated legal service providers, the CMA is taking steps to ensure these businesses are meeting consumer protection standards. These services are growing in popularity, offering a more convenient and sometimes affordable alternative to traditional legal routes, but they come with their own set of risks. It is crucial that businesses in this sector understand their obligations to consumers and that they provide a fair and transparent service.
CMA has written to several providers
As part of its action, the CMA has written to several providers of unregulated legal services, urging them to stop using harmful practices, such as aggressive upselling, refusing refunds, and not responding to customer complaints.
The businesses receiving these letters are expected to review and improve their contracts and practices to ensure they comply with consumer protection laws. Failure to do so could lead to formal investigations once the CMA gains stronger enforcement powers next spring.
Consumers do not fully understand the costs
The CMAโs primary concern is that many consumers may not fully understand the costs or options available when purchasing these services, as these are typically one-off purchases. The CMA believes that unregulated services should provide clearer information and transparency.
To address this, the CMA has published new guidance tailored specifically for businesses in the sector. This guidance follows a public consultation, which gathered feedback from consumer organizations, trade bodies, and legal service providers, all of whom supported the move.
Consumer-focused guides have been released
Alongside the guidance for businesses, the CMA has also released consumer-focused guides aimed at helping individuals make more informed choices when choosing a will writer or a divorce service.
These guides highlight the risks associated with pre-paid probate services, which can pose significant dangers if the company providing them ceases trading before the consumerโs death and clear information about what makes up a personโs estate.
This risk is one of the main reasons why the CMA is cautioning consumers to be especially careful when considering these types of services.
Hayley Fletcher, the CMAโs Interim Senior Director for Consumer Protection, emphasized that while alternatives to traditional legal services can be a more affordable and convenient option, especially when people are facing financial pressures, they should not lead to unfair or misleading practices. People often seek these services during difficult times, such as when writing a will or going through a divorce, making it especially important that these services are provided fairly and transparently. Fletcher noted that the new guides aim to empower consumers to ask the right questions before committing to a service and give businesses a chance to ensure their operations meet legal standards.
New guidelines created
The CMA’s new guidance outlines how businesses can ensure they provide fair and clear terms, deliver services with reasonable care and skill, and avoid misleading or aggressive sales practices. To raise awareness, the CMA has sent an open letter to businesses in the sector, which is also available online. Moving forward, the CMA will continue monitoring the sector and plans to carry out a formal compliance review to ensure businesses are adhering to the new guidelines.
Additionally, the CMA has warned consumers about the risks of purchasing pre-paid probate plans, advising them to be cautious and think carefully before committing. These services can come with significant consumer protection risks, such as the possibility of the provider going out of business before the consumerโs death, leaving them without any recourse. The Financial Conduct Authority has also issued warnings to help consumers understand the key issues with pre-paid probate services.
For more information about the CMAโs actions and guidance, you can visit the unregulated legal services case page.
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