Exposed: Banks that Prey on the Bereaved

Bereaved families are being preyed upon by banks and unregulated probate firms which charge thousands of pounds to execute the estate of their loved ones.

Money Mail and consumer group Which? have separately investigated the often-murky world of will-writing and probate services.

The investigation revealed evidence of:

When someone dies, executors must deal with the financial details such as the sale of assets, paying bills and distribution of the estate among the beneficiaries.

Farmer Mr B couldn't believe it when Barclays tried to charge more than £25,000 for probate services after his aunt, Miss S died. Miss S had used Barclays Wealth to write her will, and the bank appointed itself executor, placing it in line for a lucrative payout. Her estate was worth approximately £650,000, including a property, money in bank accounts and investments.

Mr B was convinced his aunt would not have signed up if she had understood the charges. He learned of the arrangement when a bank representative called to arrange a meeting.

Mr B said that 'The sales woman was very evasive about charges. It was only when I read the brochure that I found they were going to charge 4% of the estate, which would work out at more than £25,200.'

When Mr B complained the bank immediately halved the price.

Banks seem to be exploiting the fears of customers and appointing themselves as executors. Consumer group Which? sent eight undercover researchers to make 42 visits or calls to solicitors, will-writers and banks around the UK posing as divorcees wanting to write a will.

They found that banks will charge on average £10,830 for executing a typical £270,000 estate - around double the £4,759 charged by will-writers and £5,199 by solicitors.

Barclays is the most expensive of the High Street giants, with an average charge of £13,395.

A common ploy is to lure customers in with cheap wills costing as little as £75.

The Which? report also says banks appoint themselves as executor. James Daley, editor of Which? Money, said: 'These extortionate charges are completely unjustifiable. There is no need to have a professional executor in many cases. Most people have no idea what they should be paying. As they are going through a traumatic time in their lives, they are an easy target.
'It's disgraceful that banks are insisting they are named sole or joint executor, and for that privilege they are taking thousands of pounds in fees from the estate.'

The banks all say they make this clear to customers. A spokesman for Barclays said: 'We are working to review and simplify our fee structures on probate pricing, and are looking to introduce more fixed-fee pricing. Both executorships and trustee services are comprehensive services covering all aspects of whatever is necessary to fulfill the appropriate duties. The relationship is managed throughout by an experienced professional, with an average of more than 20 years in the business.'

A Lloyds Banking group spokesman said: 'Our fees are clear and transparent, and are explained up front to our customers. They reflect the quality, completeness and expertise of the service we offer.'

An HSBC spokesman said: 'Our rates are specifically designed to be fair to customers, focusing on charging for the work being completed, not on a higher percentage fee based on the estate value.
'The will-writing form and documentation clearly states in a number of places in bold that it is necessary to appoint HSBC as sole or joint executor.
'Staff are instructed to explain clearly that if a customer does not want to appoint HSBC, then they should be referred to a local solicitor of the customer's choice, or to a specific solicitor with nationwide coverage to write their will.'

It appears that customers thinking they are getting a cheap will are unwittingly signing themselves up for executor services costing thousands of pounds.

Extracts taken from a This Money article by James Salmon