The Competition and Markets Authority (CMA) is intensifying its efforts to protect consumers using unregulated legal services, such as will writing and divorce arrangements, which are becoming popular alternatives to traditional high street solicitors.

As the use of these services increases, the CMA is taking steps to ensure that businesses offering them comply with consumer protection laws, aiming to safeguard people from unfair practices.

In its latest action, the CMA has sent letters to seven providers of unregulated legal services, warning them about problematic practices such as aggressive upselling, refusal of refunds, and failure to address complaints. These companies have been urged to review and improve their contract terms and business practices or risk formal investigation, as the CMA is set to gain enhanced enforcement powers next year.

If the concerns are not addressed, these providers could face further action, including fines and penalties.

Rising demand, growing risks

While alternative legal services can provide cost-effective solutions, particularly when budgets are tight, the CMA is concerned that consumers may not always be fully aware of what they are paying for or what their options are.

This is especially important for services like writing a will or arranging a divorce, where people are often unfamiliar with the process due to the infrequency of such purchases.

In response, the CMA is issuing new guidance for businesses offering these services, outlining their obligations to ensure they:

  • Provide fair contract terms and transparent pricing.
  • Deliver services with reasonable care and skill.
  • Avoid misleading or aggressive sales tactics.

To encourage compliance, the CMA has also sent an open letter to all providers of unregulated legal services, urging them to adopt best practices. The authority plans to monitor the sector and conduct a formal compliance review in the near future.

Empowering consumers

Alongside its guidance for businesses, the CMA has published consumer guides to help individuals make more informed decisions when selecting will writing or divorce services. These guides aim to prompt consumers to ask the right questions and be aware of their rights.

One area of particular concern raised by the CMA is pre-paid probate services, which carry significant risks, such as companies potentially going out of business before the person’s death, leaving the estate unprotected. Consumers are advised to carefully consider these services before making a purchase, with additional warnings issued by the Financial Conduct Authority.

Stronger powers on the horizon

The CMA’s intervention follows the introduction of the Digital Markets, Competition and Consumer Act 2024, which will grant the authority stronger enforcement powers. Starting next year, the CMA will be able to directly determine whether businesses have breached consumer law, impose fines, and require firms to compensate consumers harmed by unfair practices.

Hayley Fletcher, the CMA’s Interim Senior Director for Consumer Protection, emphasised the importance of compliance, stating: “Unregulated legal services can provide convenient and affordable alternatives to traditional solicitors, but businesses must treat consumers fairly. Our new guidance empowers both consumers and businesses, helping to ensure that people are not misled or taken advantage of during difficult life events.”

Ongoing monitoring and compliance

The CMA will continue to closely monitor the unregulated legal services market and is ready to take further action if necessary. While issuing guidance and warnings now is an initial attempt to improve standards, it is clear that the authority will take increasingly firm action should it become necessary.

For more information on the new guidance for businesses and consumers, see: https://www.gov.uk/cma-cases/will-writing-and-other-unregulated-legal-services