The sick solicitors that prey on the bereaved

GravestonesSome unscrupulous solicitors see ways to cash in on death.

When someone close to you dies, you would want to be treated with respect and sympathy. You would hardly suspect that anyone would take deliberate advantage of your bereavement to come up with a rip-off that could cost the estate of the deceased – effectively the surviving family – tens of thousands of pounds.
And you would be even less likely to suspect that friendly family solicitor. But the sad truth is that while most lawyers are trustworthy, a minority see a death as a profit opportunity. They know the recently bereaved are unlikely to challenge them – and that many people see questioning charges as unseemly, especially after a death.
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An inaccurate estimate
My father died in late 2005. My mother died in early January this year. Both lived to 93 and both had properly drafted "mirror" wills drawn up by the same solicitor. Their estate was very typical – a three-bed semi, savings and a few shares - and they left bequests to eight family members.

When my father died, the solicitor came round to discuss "grant of probate" - the process by which the terms of the will could be carried out. You can do this yourself and many do – it's not that difficult but it can be fiddly and time consuming. You have to deal with banks, share registrars and utility companies.

The family did not want that option, not that the lawyer ever offered it. I asked him for an estimate of costs. He said about £3,500. We agreed.

Six months later, with most of the work done, the bill arrived. It was for £14,000 – four times the original estimate. I complained. He claimed it was cheap compared with other solicitors (he said they would charge £18,000 plus VAT ) and banks (£24,000 plus VAT) so why was I moaning?

I was moaning because it was so out of line with the original estimate with no evidence to show it was more complex as than expected. And there was no warning.

I threatened him with the Solicitors' Regulatory Authority. The bill dropped instantly to £6,000 – still more than he said but there were a number of tiny fiddly bank accounts and it was a compromise. This solicitor was later struck off by the SRA.

When my mother died, I was more clued up. I had written about a firm called Final Duties. It is a "probate broker" - it finds lawyers at a fair and fixed price. The fee including VAT was £3,800.

Solicitors as executors
But at least the solicitor who drafted my parents' wills did not put himself in them as an executor. If that happens, and it is common, then the solicitor can appoint his firm to do the professional work.

And it is almost impossible to challenge whatever fee is finally imposed, as lovemoney.com reader Steve from Newcastle found out.

His widowed mother died, aged 81, in late 2003. Her £700,000 will was simple. Sell the house, liquidate the bank accounts, pay inheritance tax, and then divide the balance between her two sons – both executors. Or it should have been simple.

About a year before she died, Steve's brother Alan was in the midst of a divorce. To prevent Alan's estranged wife from getting anything if he died suddenly, a solicitor persuaded their confused mother to make a new will. The lawyer would replace Alan as an executor. Why this helps is unclear.

The lawyer did not explain his fee structure – the brothers only learnt when it was too late that he would charge for every item of work plus he would charge a percentage of the estate.

His bill came to over £25,000. A competent solicitor could have easily done it for £5,000.

Family executors cannot charge for their services – not even expenses. But professionals such as lawyers, accountants or financial advisers can. And they get their money because they have the first pick at the estate.

The family asked him to stand down as executor some weeks after the mother died. The lawyer refused and charged the estate £1,000 for "counsel's opinion" that he could not be sacked.

The family appealed to the Remuneration Certificate division of the Law Society, the solicitors' professional body. This has now been shut down but was supposed to offer arbitration when legal fees were considered too high.

It backed the brothers, telling the lawyer to back down to around £10,000. But as the Law Society scheme was not legally binding, he refused to take any notice. He had his money and was not letting go.

Since then, the brothers have spent more money attacking the lawyer via the courts. But it has proved expensive and has not got them very far.

The morals of this cautionary tale? Don't trust solicitors. And ensure that executors of any will are confined to family members. They can then have the choice of doing it themselves or getting a moderately-priced professional to carry out the work.

Executors can be, but don't have to be, beneficiaries under the will. Once you let a lawyer or bank in to your will, you are storing up trouble for your family.

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The sick solicitors that prey on the bereaved

More than 46,000 of 106,000 the complaints received by the FOS in the second half of last year related to payment protection insurance (PPI). And the organisation is expecting to receive a record 165,000 PPI complaints in 2012/2013.

The huge numbers are due to the PPI mis-selling scandal that should now be a thing of the past, but there is no doubt that the insurance, which can add thousands to the cost of a loan, is highly unpopular!

(Pictured: Martin Lewis after the PPI payout ruling)

Complaints about mortgages jumped by 38% in the last six months of last year, the FOS figures show, compared to an increase of just 5% in investment-related complaints.

Common gripes about mortgages include the exit penalties imposed should you want to sell up or change you mortgage before a fixed or discounted deal comes to an end, and the high arrangement fees charged by many lenders.

While there is nothing in the data released by the FOS about the number of complaints relating to savings accounts, hard-pressed savers have been struggling with low interest rates for several years now.

You can get up to 3.10% with Santander's easy-access eSaver account, but many older accounts are paying 1.00% or less and even this market-leading offer includes a 12-month bonus of 2.60% - meaning that the rate will plummet to just 0.50% after the first year.

Banks are imposing the highest authorised overdraft interest rates since records began, with today's borrowers paying an average of 19.47%, according to the Bank of England.

A typical Briton with an overdraft of £1,000 is therefore forking out around £200 in interest charges alone. Coupled with meagre returns on savings, it's enough to make your blood boil!

While authorised overdrafts may seem expensive, going into the red without permission will cost you even more due to huge penalty fees.

Barclays, for example, charges £8 (up to a maximum of £40 a day) each time that there is not enough money in your account to cover a payment.

If you need to send money abroad, the likelihood is that your bank will impose transfer charges - and offer you a poor rate of exchange. Someone transferring a five-figure sum could easily lose out by £500 or more as a result.

The good news, however, is that you can often get a better deal by using a currency specialist such as Moneycorp.

Automated telephone banking systems, not to mention call centres in far-flung parts of the world, are one of our top gripes - especially as we often encounter them when we are already calling to report a problem.

In the words of one disgruntled customer: "What is it about telephone banking that turns me into Victor Meldrew? Well, maybe it's the fourteen security questions, maybe it's the range of products that they try to push or maybe it's because I'm forced to listen to jazz funk at full volume while my phone bill soars.

"Actually though, I think it's because the people I eventually speak to rarely seem able to solve the issue I'm calling about."

The days of a personal relationship with your bank manager are long gone - for the huge majority of us at least.

When ethical Triodos Bank investigated recently why around 9 million Britons would not recommend their banks to a friend or relative, it found that almost a third felt they were not treated as individuals. Another 40%, meanwhile, were simply disappointed with the customer service they received.

When you're in a rush, the last thing you want to do is wait in a long queue at your local branch.

Researchers at consumer champion Which? recently found that most people get seen within 12 minutes, but you could have a much longer wait if you go in at a busy time. Frustrating stuff!

The Triodos Bank research also indicated that the bonus culture that ensured the bank's high-flying employees received large salaries, even when it was making a loss at the taxpayer's expense, was hugely unpopular with consumers.

About a quarter of those who would not recommend their current banks said this was the main reason why. And with RBS executives sharing a £785 million bonus pool despite the bank, which is 82% publicly owned, making a loss of £2 billion last year, it's not hard to see why.

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