CMA unveils draft guidance for unregulated providers

The Competition and Markets authority (CMA) published draft consumer protection guidance in April, focused on unregulated legal services providers offering will writing, online divorce and pre-paid probate services.

It warned businesses about undertaking sales practices that were “misleading or aggressive, or otherwise contrary to statutory obligations”, including making misleading claims to consumers in relation to pricing, potential savings and comparisons with fees charged by specialist lawyers.

The CMA estimated there were at least 3,800 unregulated businesses providing legal services in England and Wales alone, with the largest number working in wills and estate administration. The guidance aimed to help these companies “better understand and comply with their existing obligations under UK consumer protection law”.

The draft guidance followed the watchdog’s investigation into will-writing and other unregulated legal services last summer, which identified practices that create risk for consumers and could breach consumer protection law.

The draft guidance covered the most important consumer protection law requirements, outlining steps businesses should take to ensure consumers have the information they need to make informed decisions, that terms and conditions are fair, “services are performed with reasonable care and skill” and sales practices not “misleading or aggressive”.

Outlining specific issues for will writing and online divorce service providers, the CMA issued a series of ‘do and don’t’ checklists.

The divorce sector was warned about “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”.

With will writing, the CMA warned 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”.

The CMA set out concerns about the risks associated with pre-paid probate services products, saying 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.

The CMA consultation closed on 13 June 2024. The final guidance is expected to be published later this year.