The Competition and Markets Authority (CMA) say they are ‘taking action to protect the growing number of UK consumers who are opting for alternatives to high street solicitors’ when making a will or getting divorced.
Unregulated companies could face action from the regulator if they are suspected of refusing consumers refunds, upselling add-on products or services ‘aggressively’. Areas of focus are divorce and probate services.
The CMA claims businesses that provide unregulated legal services are a growing part of the legal sector and ‘it is crucial they understand and comply with their consumer protection obligations’.
‘People buying these services need to be sure they are getting a fair deal,’ said the regulator, ‘As these types of services are not purchased very often, the CMA is concerned that consumers may not have a clear idea of what they may be expected to pay or the different options available to them.
‘So, to help boost compliance levels across unregulated legal services, the CMA is also issuing new tailored guidance for businesses in the sector.’
The new guidance follows a consultation which received widespread support from consumer bodies, trade associations and the firms offering these services, according to a press release from the UK government.
Hayley Fletcher, interim director for consumer protection at the CMA, said:
‘Alternatives to conventional high street law firms can offer convenient services for people – and when day-to-day budgets are already under pressure, they can be a more cost-effective option. Those offering these types of legal services often meet their customers at some of the most challenging times in life, so it’s particularly important that a difficult time is not made harder by misleading or unfair practices.
’Our new guides will help empower consumers to ask businesses the right questions before they buy and give businesses an opportunity to get their house in order.’
The CMA has written to seven providers of unregulated legal services cautioning them against using particularly concerning practices such as aggressive upselling, the refusal of refunds and failing to respond to complaints.
Those who receive a letter should acknowledge it and act on any recommendations to review and revise their contract terms and practices. With the CMA set to receive stronger enforcement powers from next spring, if concerns are not addressed, the businesses could face a formal investigation.
Earlier this year the CMA opened a consultation on draft guidance for unregulated businesses. The draft guidance was intended to help providers of these services to better understand, and comply with, consumer protection law.
The CMA sought views from businesses in the sector, consumer agencies, trade bodies, and other interested parties following an investigation in July of last year that looked into online divorce, will writing and probate services.
The CMA said the investigation was launched over concerns that ‘not all providers may not be complying with consumer law and consumers might not be getting a fair deal’.
As part of this investigation, the CMA gathered feedback and information from businesses, consumers, and stakeholders, and decided that guidance would be beneficial.
The regulator said at the time that if their review demonstrated that concerns remain, they would consider whether enforcement action is necessary to protect consumers.
Law Society of England and Wales president Nick Emmerson said at the time:
“We welcome this consultation, as it investigates the potential risk consumers face from using unregulated services to write their wills. We share the concerns raised by the Competition and Markets Authority (CMA) about possible breaches of consumer protection law such as misleading advertising, pressure selling and coercion of vulnerable customers.”