Recent updated guidance from government concerning public health funerals confirms that there is no legal requirement for local authorities to identify next of kin. Where councils still do this by using genealogists, it stresses the importance of carrying out due diligence ‘to help ensure satisfaction with the provider'.

Due diligence may ensure satisfaction with the provider from the point of view of the local authority, but what about the satisfaction of the next of kin? 

This stipulation does nothing to address the need for protection for next of kin from the increasing occurrence of exploitative fees, identification mistakes and the delays or errors arising from those firms appointed exclusively by local authorities then going on to handle the deceased's estate.

According to an FOI request in March last year, of 325 councils in England and Wales who responded, 185 (57%) had an acknowledged ‘arrangement' with an heir hunter. Of these, only seven (4%) had a written contract in place, meaning that the relationship remained informal and not subject to any scrutiny.

Concern arises because exclusively received details of a deceased from a council provides an heir hunter with an opportunity to charge next of kin a finder's fee for claiming any assets in the deceased person's estate.

Where firms have such unique access some are charging next of kin fees of between 15% and 25%, and even up to 40%, of the value of any estate they are able to claim. This compares with fees of 5% (or often less) where there is a property involved and firms compete through accessing cases on the Government Legal Department's ‘Bona Vacantia' division (BVD) ‘unclaimed estates' website. This means that next of kin are paying out many thousands of pounds in unnecessary fees because a monopoly has been set up by a council.

Exclusive arrangements lead to mistakes being made. With other researchers unaware of a case, there are none of the usual checks on the research conducted by the one given the details. This can, and does, lead to estates being awarded to those not entitled and sometimes not even related. The missed heirs will not know that a relative has died and they have been denied a rightful inheritance.  

It is rare for next-of-kin to complain as usually they know of no alternative as only one firm approaches them. Indeed, heir hunters often present themselves as acting on behalf of the council, lending them an air of authority which the public do not question. 

The new guidance does nothing to change the long-established best practice that the estates of those who die intestate with no known next of kin should be referred within five days to the BVD. This enables multiple firms to compete with each other in seeking to locate rightful heirs quickly who can advise on the funeral and claim on the estate.

With a number of firms working simultaneously to track down relatives, posting a deceased's case on the BVD site is the quickest and most reliable way to ensure that the maximum number of relatives are identified.  In an exclusive arrangement the heir hunter is not challenged by other firms. It's quick and free to refer a case to the BVD and funeral costs are the first cost to be recouped from an estate in any circumstance.

Many local authorities fairly make the point that the guidance is not sufficiently clear or explicit. Two thirds of respondents to the FOI request say that they would welcome clearer guidance or regulation around this issue.

Local authorities could unilaterally take action to ensure greater protection for next of kin. One option is to publicise a list of cases on their own website. Almost 200 councils already do this but many need to post full details much more quickly, and certainly before they give them to an heir hunter directly.

Another option, already used by some, is for councils to select a panel of three or more firms to instruct simultaneously who will then act in competition with each other. Both of these measures will ensure the maximum chance of a speedy identification of as many relatives as possible and prevent next of kin being ripped off.

Carolyn Lord is commercial and compliance director at Anglia Research