Unregulated online legal services like “quickie divorces” and DIY wills are to be the subject of a consultation by the Competition and Markets Authority (CMA).
The regulator is examining potential breaches of consumer law amid concerns that some online legal services may mislead people or come with hidden costs.
Sarah Coles, head of personal finance, Hargreaves Lansdown, said that the CMA had found some worrying practices and opened a consultation to explore how to better protect people.
She said: “Online legal services have opened up cost-effective and efficient routes to get help with some of the toughest legal challenges we face. However, unfortunately, they’ve also flung the door open to unscrupulous rip off firms, which could leave us far worse off.”
The regulator highlighted that some will writers advertised cut-price advice, but as people go through the process, the costs can mount unexpectedly. Some also use potentially unfair terms, so they might write off any liability of the adviser.
The use of online divorces boomed during the Covid-19 pandemic and the CMA found cases of some online legal services using incorrect forms, putting in inaccurate details and sending papers to courts late.
It found examples of pre-paid probate services that were mis-sold and that were not clear about what costs were included in the up-front fee.
Coles said: “There have also been signs of vulnerable older people being put under pressure by some firms to sign up to will services, so they could be paying more than they need to for something that’s fundamentally wrong for them. It’s something that has rung alarm bells in the pre-paid probate arena too.”
She added: “Many of the services that we traditionally ask a solicitor for help with can actually be done by anyone – like divorce, will writing and probate. It means that technically we can tackle it alone, and if we want a bit of help without the cost of a lawyer, we can go to an unregulated adviser. There are some innovative and effective firms operating in this area, however, unfortunately, there are also some rip-off companies too.”
