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Anger at Banks' "rip-off" charges for administering dead client's estates
BANKS have been accused of ripping off bereaved relatives by imposing "ludicrously high" charges on the estates of customers when they die.
Barclays, HSBC and Lloyds Banking Group are selling services that cost up to 4% of a deceased client's assets for checking wills, assessing taxes and paying beneficiaries. The banks usually subcontract the probate work to law firms such as ITC, which levy charges of 1% on estates if customers approach them directly.
Experts say bank customers are not aware of the scale of the fees when they agree to the deals.
Francis McCrory, of Lewisham, south London, arranged for Woolwich, a subsidiary of Barclays, to handle his £450,000 estate. When McCrory died last summer his wife discovered that £18,000, plus Vat, was to be collected in fees by ITC under the arrangement with Woolwich. Her son tried to bring in another firm but ITC refused to agree to this.
Adam Walker, the founder of Final Duties, a probate broker in south London, said: "Probate services sold by banks can be up to 4% [of an estate], which is ludicrously high. Costly bank deals rely on customers not knowing the real fees."
A spokesman for Barclays said a 4% charge was at the "top end" of probate work.
Solicitors alarmed at links between Bereavement Advice Centre and probate firm
Financial links between a not-for-profit advice organisation and a probate services company have come under fire from solicitors.
The Bereavement Advice Centre publishes a website with the subtitle ‘What to do when someone dies’. Solicitors say that the organisation’s leaflets publicising a helpline promoting BAC’s commercial owner ITC Legal Services are also widely available at local authority registrars.
The website, which has a .org non-commercial address, says the centre was established ‘by a partnership of the National Association of Funeral Directors and ITC Legal Services (Independent Trust Corporation)… the largest probate company in the UK’. It says that this support ‘is for a finite period until we are able to apply for charitable status’.
Under the heading ‘how to deal with probate’, the site lists four options, the second of which is ‘Use a specialist company such as ITC legal services’. It says the company is ‘competitive with solicitors on cost and less expensive than some banks’.
Patricia Wass, a partner at Plymouth firm Foot Anstey and chairwoman of the Law Society’s wills and equity committee, said she is concerned that registrars ‘up and down the country’ are giving BAC’s leaflets to people when they report a death. This might imply that local authorities sanction BAC’s promotion of ITC’s commercial interests, she said.
Jeremy Groeger-Wilson, head of the wills and estates team at Kent firm Clarkson Wright & Jakes, disputed ITC’s claims on solicitors’ costs. ‘ITC quoted one of my clients, who had lost her father, £5,000 to finalise his estate. Unaware of the previous quote, I told her my costs for the administration of this very simple estate would be £500 plus VAT – a tenth of ITC’s proposed fees.’ A spokesman for another Kent law firm, Furley Page, said it had discussed the relationship between BAC and ITC with Kent County Council. ‘The public should be made aware of the link between the not-for-profit BAC and the commercial ITC. The council has assured us it will investigate this relationship before deciding what action to take.’
ITC said that its link with BAC is made clear in a recorded message to all callers to helplines and also on the website. Anne Wadey, a spokeswoman, said ITC based its claims of lower costs on published Law Society fee rates and that a MORI poll commissioned by an independent third party in 2008 supported this. ‘If the estate appears at all complex we will recommend that people use a professional service. We already use the Law Society search facility to identify local solicitors for callers and provide a link on our website. We also provide a free guide for people wanting to do probate themselves.’
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