New research has found next-of-kin are losing out on inheritances or having to pay excessive charges to claim them as a result of increasing numbers of local authorities disregard government guidelines for identifying rightful heirs where people die with unknown relatives and without leaving a will.
A research report by an international genealogy firm, Anglia Research, showed that there was an increase of 90 percent between 2016 and 2017 in the number of local authorities ignoring government procedure for dealing with the legacies of people dying intestate.
If a deceased person has no known relatives or friends, local authorities take responsibility for their funeral, commonly known as a pauper’s funeral. Government guidelines dictate that the death should be listed publicly, enabling relatives and specialist firms to try and trace next-of-kin. Specialist firms can then offer their services, with fees only paid when a successful claim for inheritance is made by next-of-kin.
Instead, according to the research, many councils are now giving cases to ‘heir hunter’ firms on an exclusive basis, meaning firms have been able to charge higher fees to next-of-kin knowing that they won’t be undercut. Anglia Research says in most cases consumers “don’t know they have a choice” and end up paying these exploitative rates, sometimes losing out on tens of thousands of pounds.
Research found that in some cases next-of-kin have missed out completely on their rightful inheritance due to a lack of competition and transparency, leading to mistakes being made and legacies being given to those not entitled to them.
Anglia Research’s chief executive, Peter Turvey, said: “Where heir hunting firms are given cases exclusively by local authorities they are charging at least 15 percent to 25 percent in fees, compared to cases on the open market where competition drives fees down to around two to five percent.
“This practice is exploiting next-of-kin who don’t know they have any other option than to pay these extortionate rates. We are calling on all local authorities to end exclusive arrangements and follow the government guidance which is designed to protect next-of-kin.”