Ontario Acts to Limit Heir Hunter Charges
28th January 2010
- Regulation to curb excessive heir hunter charges gains Royal Assent in Ontario, Canada
- Title Research continues to lobby for greater protection against excessive percentage fees in the UK
Heir hunter charges in Ontario, Canada are undergoing a radical overhaul with the government passing legislation to make percentage fees and contracts fairer and more transparent for beneficiaries.
Title Research, the probate genealogist, commends the recent legislative amendments to the Crown Administration of Estates Act which states all estates administered by the Office of the Public Guardian and Trustee of Ontario (OPGT) must:
- disclose the name of the deceased and the value of the estate before a beneficiary is asked to sign a commission fee agreement;
- apply a cap to a maximum of 10% of the value of the estate on percentage fees;
- make clear on the commission fee agreement that the heir does not need to sign the commission fee agreement in order to claim their interest in the estate;
- make clear on the commission fee agreement the beneficiary can claim their entitlement directly from the OPGT;
- disclose a detailed breakdown of costs by the heir hunter charging the fee within 60 days of a payment
Title Research is also lobbying for regulation to come into effect in the UK and believes there is a need for greater protection against excessive heir hunter fees. Furthermore, there should be best practice guidance from legal trade bodies for probate practitioners who instruct genealogists which allows beneficiaries to be charged fairly.
Tom Curran, Chief Executive of Title Research, said: “It is clear there are increasing concerns overseas about the huge fees charged by heir hunters and the sales tactics they use. It is extremely encouraging to see governments abroad passing legislation to regulate heir hunter charges to avoid the problems we see here. We believe it is grossly unfair for heir locators to sign-up beneficiaries to contracts that often result in the beneficiary needlessly signing away up to a third of their inheritance to the heir locator for being found. Fees at this level are excessive and disproportionate to the amount of work involved in locating heirs.”
“We are delighted that these amendments have come into force in January. The new rules highlight the urgent need for action within the probate research sector in the UK to protect consumers from being charged exorbitant percentage fees. This is a positive step in the right direction to ensure practices in this industry are cleaned up.
“There is a need for better consumer protection in the UK. We are urging beneficiaries who feel they have been overcharged or treated unfairly to seek advice from their local trading standards office or seek legal advice.”
Title Research does not charge percentage fees. Instead, fees are based on an hourly rate or a fixed fee which reflects the time, effort and skills needed to do the job. Because of percentage fees, it is estimated that ‘heir hunter’ firms are taking millions of pounds out of British inheritance pots each year, through an unfair and excessive charging method which sees relatives sign away up to 33% of their entitlement just for being found.* Even 10% on a large estate could still be huge cost to the beneficiary.
Many firms of probate genealogists also research unclaimed, intestate estates as advertised by the Treasury Solicitor, a Government department.** These companies race to find the relatives who are in line for the inheritance and secure themselves money intended for the beneficiary, in the form of a percentage fee. Title Research is calling for government reform of how the Treasury Solicitor deals with and advertises unclaimed estates, which has fuelled the chase for excessive fees and many of the high pressure sales techniques to sign up beneficiaries.
Title Research also believes that many of the tactics employed by heir hunters to sign-up beneficiaries are unreasonable.
“Tom Curran continued: Many people will be contacted by an heir locator out of the blue and while they are told that someone related to them has died and they stand to inherit some money, the exact details of who has died are withheld until they agree to sign away a significant proportion of their rightful inheritance. In many instances they are not told the amount they stand to inherit, so they are effectively being asked to sign away a large percentage of an unknown amount. It’s hardly a fair and transparent, let alone sensitive, process.”
“I would like to see the Treasury Solicitor adopt a different working model for dealing with unclaimed estates in this country whereby they appoint from a panel of genealogists to trace heirs to BV estates. This would ensure normal working practices were adopted to find beneficiaries and fees would be more closely controlled and set by the Treasury Solicitor at the outset. This would also remove the need for information to be withheld from the beneficiary to induce a signed contract.”
“Tom Curran concludes: Scores of solicitors have contacted Title Research supporting our campaign and share our concerns about the excessive fees charged by heir hunters and the practices they undertake to put pressure on beneficiaries to sign-up”.
Richard Grosberg, a partner at Nelsons Solicitors in Nottingham, said: “Sadly, it seems to be common practice for some heir hunter firms to charge high percentage fees. Beneficiaries are taken advantage of because they believe the only way to get their share is to sign away a large proportion of their inheritance, when in fact they are entitled by law to receive their entitlement. As with other probate fees, heir locators should charge a fixed fee or time based fee which fairly reflects the amount of work involved, not an arbitrary and excessive percentage of someone’s entitlement.”
- Ends -
For more information on the recent legislative amendments to the Crown Administration of Estates Act in Ontario, Canada, please contact the Title Research media team:
Jeena Nadarajan
Lansons Communications
020 7294 3629 / jeenan@lansons.com
Livia Murphy
Lansons Communications
0207 7294 3693 / liviam@lansons.com
Notes to editors
* Market research was carried out by Opinium, among 2,161 members of the general public, 104 ‘missing beneficiaries’ and 315 ‘known beneficiaries’, online and over the telephone, in January and February 2009. It is estimated that the combined turnover of firms charging percentage fees could be as much as £10 million. Based on the Opinium report, the average inheritance was found to be £67,500 and where beneficiaries have paid a percentage fee, the average percentage paid was 20% of their entitlement.
The average fee charged by Title Research per beneficiary is £420. This is always taken from the estate as a whole, rather than the individual beneficiary.
**Title Research only seeks out beneficiaries under instruction from solicitors or executors and does not chase publicly advertised unclaimed estates. Title Research does not charge percentage fees for any case and instead charges a fee based on a fair reflection of the amount of time/effort/skills needed to locate beneficiaries. Such fees are agreed in advance with the probate practitioner handling the estate. The fee agreed is often a fixed fee.
Title Research never withholds the name of the person who has died from heirs.
The Office of the Public Guardian and Trustee of Ontario (OPGT) explains the reasoning behind the Ontario’s Governments’ decision to curb excessive heir hunter charges. Click here to read the Questions and Answers.