Westminister Hall Debate
The CAB service
Citizens Advice is the national body for Citizens Advice Bureaux (CABx) in England, Wales and Northern Ireland. The CAB service is the largest independent network of free advice centres in Europe, with 430 main bureaux in England, Wales and Northern Ireland. Bureaux provide advice from over 3,300 outlets, including bureaux in the high street, community centres, health settings, courts and prisons. All CABx are registered charities.
The CAB service has twin aims: to ensure that individuals do not suffer through a lack of information about their rights; and equally to exercise a responsible influence on the development of policies and practices, both at a local and national level. In 2006/07 bureaux in England and Wales advised around two million people with new or ongoing problems. During this period over 300,000 inquiries were on legal issues.
Introduction
Citizens Advice Bureaux frequently report cases of people who have been conned into parting with many hundreds of pounds by bogus will-writers cashing in on people’s desire to make sure their financial affairs are settled according to their wishes after they die.
The making of a will is relevant to the vast majority of consumers. Owner-occupiers make up 70% of households in the UK and this property will need to change hands when the owner dies. In addition, inheritance in many UK families may need to take account of complicating factors such as divorce and subsequent re-marriage.
Citizens Advice believes that it is important for consumers to have a simple and easily understood mechanism for making, amending and administering wills and that these wills should be easy to locate after death. The National Consumer Council recently reported that ‘27.5 million adults in England and Wales (64 per cent) do not have a will’ (NCC report, Finding the will, 2007, p.3).
CAB evidence
CAB evidence highlights a variety of problems that clients experience with wills and associated legal products. Such problems include:
- a lack of price transparency;
- high prices for will-writing services;
- lack of knowledge about the terminology used and which elements to include when making a will, resulting in the sale of additional services that are not understood by consumers and which they may not need;
- the use of pressure selling techniques;
- lack of easy access to any central database of wills created by professionals or intermediaries; and
- poor customer service.
The following cases illustrate these problems:
CAB clients in Lincolnshire, who were receiving benefits, responded to an advertisement offering wills for £23.50. The representative came to their home and charged them £705, which included storage. The clients feel they were taken for a ride and the as the clients still have the original will they seem to have paid for a service they have not been given.
Elderly CAB clients from Nottinghamshire responded to an offer of will writing for £20 plus VAT and, as they live in a rural area with no transport, opted for a home visit. Their joint assets are under £200,000 and the bill for the range of services they were sold came to £1,052.80. The salesman stayed a long time and left no documents and the couple only discovered what they had bought when the paperwork came in the post. The bureau commented that as they already had wills these could have been amended very cheaply to meet their requirements instead and that will writers should be regulated.
A CAB in Warwickshire saw a client who sought advice having received a cold phone call offering to help with making a will and been persuaded to accept a visit. The adviser found she had agreed to a £176 registration fee plus 46 payments of £49 to be collected by Direct Debit for the company to act as executors, totalling £2430. The client had not understood the purchase and has tried to cancel.
A CAB Devon saw clients who felt conned having paid £429 for wills to replace those made 20 years earlier. They were persuaded to set up a trust they later found they did not need, to make new wills which were promised in 28 days. The wills have not materialised and their requests for a refund have been ignored. The clients told the bureau they cannot face going to court
A North London CAB commented on the need for a national register for wills. Their client sought advice because her mother had died and she was not sure how to trace any will she might have made. The client was worried any will might never be found.
A CAB in Surrey reported that their client was in the unusual position of being entitled to legal aid to make a will but that no local solicitor was prepared to do this work. The client is disabled and wanted to make provision for his disabled daughter.
Many people are not taking the proper legal steps to manage what happens to their assets after death. Although there is a growing market in probate products, there is insufficient consumer knowledge and confidence to enable people to gain the full benefits of obtaining a will and to access this market in an informed way. We recommend a combination of regulatory and consumer information initiatives to tackle these problems. In the longer term the Ministry of Justice may need to review the law of inheritance and intestacy to encourage further simplification and reform of the probate system so that families can have greater confidence that intergenerational assets will be better protected.
Recommendations and conclusions
- ·A lack of price transparency – problems around transparency should be improved by the transposition of the Unfair Commercial Practices Directive into law in April, through the Consumer Protection from Unfair Trading Regulations. Under these regulations it will be considered unfair not to provide the sorts of information that consumers need to make what the legislation calls a ‘transactional decision’, where this has a financial effect. However, as there is no specific redress under these regulations consumers may still be left out of pocket.
- Demystification – In order to improve understand of the terminology used in relation to wills and associated products, as well as an understanding of whether these products meet particular needs, it should be standard practice for those writing wills to provide appropriate information. To assist with this Citizens Advice has suggested to the OFT that business to consumer codes of practice in the wills sector should include a glossary of terms. There is also an important potential role for the Ministry of Justice’s Public Legal Education strategy to promote greater legal literacy and understanding of inheritance. More specifically, the importance of making a will and how to do so should also be promoted to the public.
- Pressure selling – the Consumer Protection from Unfair Trading Regulations will again help in tackling pressure selling techniques. In addition, changes to doorstep selling law in the UK, due this autumn under the Consumer, Estate Agents and Redress Act 2007, will provide for consumer redress. Under the new doorstep regulations all doorstep sales will attract cancellation rights. This, together with the cancellation rights for wills sold over the phone or on the internet, through the Distance Selling Regulations, will be of real value. But there is a further problem relating to cancellation. In order to know whether to cancel, and to be able to do so in the required time slot, consumers will need to know exactly what they have bought. This may not be apparent until some time later when the will itself is delivered for signature.
- Regulation – the various actions outlined above could be helped by those businesses who use self-regulation, such as the OFT code approval scheme. But this is not compulsory. Citizens Advice considers that consumers should be entitled to access a trustworthy will writing facility. We therefore suggest that the case for independent regulation is considered. The Legal Services Board may be able to regard will-writing as a ‘probate activity’ under the Legal Services Act 2007 (section 12(1)d), and therefore only to be carried out by firms or individuals approved by a legal services regulator or licensing body. It would be a matter for the Legal Services Board to devise the precise scheme of regulation that would be appropriate for will-writing activity which is not undertaken by the legal professions, but it would need to be proportionate to keep small, specialist will-writing firms in the market whilst enabling mass providers, such as banks, to develop will-writing services. This form of regulation is also favoured by the National Consumer Council in their ‘Finding the will’ report.
- A central database of wills – Citizens Advice proposes that wills created by legal professionals or authorised intermediaries could be electronically registered for a small and defined fee. This could operate in a similar way as the Land Registry does when buying a home. Adopting an electronic system would enable individuals to keep the original, or turn it over to a third party, such as a solicitor, bank or relative. A register of wills could be linked to the registration of deaths, so that when a death is registered, as it must be, the existence of a will would be immediately apparent. The cost of registering existing wills would likely be prohibitive so registration would be voluntary and, where no registration occurs, the current system would apply. The scheme would therefore be run on an opt-in basis and would not invalidate wills which remained outside.
Parlaimentary contact: David Tinline Parliamentary
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