Legal Services Consumer Panel says changes to consumer protection would be 'false economy'

Sweeping changes to the consumer protection regime could leave people exposed to rogue operators offering legal services, warned the Legal Services Consumer Panel.

In its response to the Department of Business, Innovation and Skills consultation paper, Empowering and Protecting Consumers, the advisory body to the Legal Services Board said slashing funds to Trading Standards, which has to take on enforcement work previously carried out by the OFT, was a "false economy".

The Panel also warned that Citizens Advice, which does not have an eforcement role, also lacked expertise in this area.

"Our concern is that deep funding cuts will mean legal services are neglected leaving consumers exposed to rogue operators," the Panel said.

However Citizens Advice chief executive Gillian Guy said people should not be concerned: "We already work closely with Trading Standards at a national and local level; providing valuable information to help them tackle rogue traders through enforcement.

"And the new consumer landscape will see us working more closely with them than ever before to protect consumers."

The types of legal services the Panel is particularly concerned about are those that are totally unregulated which means anyone can set up a business; such as will writing.

There are an increasing number of these services springing up, especially online, for example the Society of Will Writers has 2,000 members; who are counted on an individual rather than firm basis.

An investigation by the Panel this year found some will-writing companies are very good, but there is an admitted ‘rogue element'. The risks to consumers of a regime that allows anyone to set up a will-writing company are great.

The successful 2010 prosecution of Willmakers of Distinction for fraudulent trading and the theft of over £400,000 of clients' money is one example of how things can go badly wrong.

Another problem with an unregulated will-making service is a lack of legal knowledge. In a survey carried out for the Society of Trust and Estate Practitioners, 60 per cent of its members had come across will writers whose wills were invalid due to basic mistakes.

Problems outlined included problems with witnesses, basic typing errors, trust errors, the use of standard clauses and a lack of legal knowledge. The problem is many people who have paid for these wills, do not have the legal knowledge to know if they are getting a good service. Finding this out could come too late for the consumer.

The Panel's investigation also found many examples of sales practices that breached existing consumer legislation, such as the Consumer Protection Regulations.

Trading Standards would normally act on these issues. But the Panel warned that with the additional work Trading Standards will have to take on, such cases may not take priority.

Elisabeth Davies, chair of the Legal Services Consumer Panel told us: "Not all legal services are regulated and in these circumstances consumers rely on trading standards to take enforcement action against lawbreakers.

"Our recent investigation into will writing found a rogue minority engaged in sharp practices such as aggressive selling and overcharging in breach of the Consumer Protection Regulations, but consumers lack the power to take these traders to court.

"We are deeply concerned that funding cuts to trading standards will mean legal services provided by organisations other than solicitors will not be policed effectively in future."