The Government watchdog told the 3,800 unregulated firms in an open letter about its concerns over the practices of some will writers, online divorce lawyers and pre-paid probate services.
It wrote: “The purpose of this letter is to highlight new guidance the CMA has published, which is intended to help unregulated providers of these services to understand and comply with their obligations under consumer protection law better.”
The lengthy guidance, compiled after an investigation in July, warned firms about providing misleading information or actions while not omitting any key considerations. It also cautioned businesses against hidden fees or any unfair price increases.
Businesses were also prompted not to use any aggressive upselling sales techniques that force the customer to use their services.
Another issue was the ‘reasonable care and skill’ undertaken by businesses, and if there are unnecessary delays with the service being provided, customers must be given the right to cancel the contract and for a refund to be offered.
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The practices of those unregulated firms will be reviewed to make sure they comply with consumer protection law.
Any companies that fail to adhere could be hit with financial penalties, with new enforcement powers the CMA will have from April 2025 under the Digital Markets, Competition and Consumers Act (DMCC Act).
The watchdog also warned that recipients of poor or unfair service would have the chance to pursue a claim against the firm for breaching consumer law.
Will writers were told “not to take advantage of the imbalance of experience and expertise” between the firm and the customer, as it’s likely the customer will be using the service for the first time.
Unregulated providers of legal services often provide cheaper alternatives to their high-street competitors. These services have not gone through the same authorisation process as their regulated ones. Previously, if something went wrong, there’d be no legal regulator to hold the firm to account.
‘New guides will help empower’
Hayley Fletcher, the interim senior director for consumer protection of 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.”
Fletcher added: “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.
“To ensure they comply with the law, we expect businesses in the sector to read the new guidance and make the necessary changes to their terms and practices. Those who don’t could face enforcement action.”
