Conveyancing fraud

Category: Fraud and financial crime · Reviewed by the Apex broking team · Last reviewed 2026-08-22 · ~5 min read

The two patterns

Identity fraud. A fraudster poses as the registered proprietor — commonly of an unmortgaged property, a property let to tenants, or one standing empty — instructs a firm, produces forged identification, and completes a sale or a remortgage. The money leaves before anyone notices the seller was never the owner. Payment diversion. Criminals obtain access to email traffic between the firm, the client, the other side and the lender, then substitute their own account details at the moment funds move. The Solicitors Regulation Authority has warned about the timing pattern in particular: attacks are aimed at Friday afternoons, when completion monies sit in client account and the theft is not discovered until the following week. Some attempts are followed by a telephone call from someone posing as a bank fraud team, asking the firm to confirm security credentials.

How professional indemnity responds

Solicitors’ PI is written on the SRA Minimum Terms and Conditions, and its subject is the firm’s civil liability arising from private legal practice. If a client or lender suffers loss because the firm failed to carry out adequate identity checks, failed to spot the warning signs of an impersonated seller, or paid away funds on instructions it should have verified, that is a claim against the firm and the PI policy is engaged. The SRA rules set the minimum sum insured for each claim at “at least £3 million” for relevant recognised and licensed bodies and “at least £2 million” for other firms, with defence costs in addition, and require six years of run-off. Where dishonesty inside the firm is alleged, the Minimum Terms are designed so that cover is not lost for those who neither committed nor condoned it — see innocent partner defence.

How crime and cyber cover respond

PI does not indemnify the firm for its own money. Where the loss is the firm’s — office account funds paid away, or client account shortfalls the firm must make good — the relevant covers are commercial crime and cyber. Wordings differ sharply here, and the difference is worth reading before a loss rather than after: some respond only where a computer system was actually compromised, others where an employee was deceived into making a transfer without any system intrusion, and others require both. See funds transfer fraud cover and social engineering fraud cover for the distinction, and PI vs cyber insurance for the boundary between the two towers.

The land registration backstop

Registered title in England and Wales is guaranteed by the state, and Schedule 8 of the Land Registration Act 2002 provides that a person is entitled to be indemnified by the registrar if they suffer loss by reason of “rectification of the register” or “a mistake whose correction would involve rectification”. That indemnity is not unconditional: paragraph 5 provides that no indemnity is payable for loss suffered “wholly or partly as a result of his own fraud, or wholly as a result of his own lack of proper care”, and it may be reduced where the claimant is partly responsible. A firm whose identity checking was inadequate cannot assume the registry will absorb the consequence.

Warnings and guidance

The Law Society publishes guidance on property and registration fraud, and the SRA has issued repeated warnings on payment diversion, including the Friday afternoon pattern. Both point in the same direction: verify bank details through a channel the firm established independently, never one supplied in an email; treat late changes to payment instructions as suspicious by default; apply enhanced identity checking where the seller is not in occupation or the property is unencumbered; and record the checks that were done.

What brokers see in practice

Three things recur. Firms discover after the event that the loss was the firm’s own money and that they hold PI but no crime cover. Firms find that their cyber policy responds to a system compromise but the attack involved no compromise at all — only a convincing email. And firms find the notification arrives late, because the initial reaction was to try to recover the funds rather than to notify. A conveyancing loss should be reported to insurers as a circumstance immediately; see circumstance notification.

Frequently asked questions

Does professional indemnity insurance cover conveyancing fraud?

It covers the firm’s civil liability to a client or lender arising from the firm’s conduct — for example, inadequate identity checks or paying away funds on unverified instructions. It does not indemnify the firm for the theft of its own money, which is the province of crime and cyber cover.

What is Friday afternoon fraud?

It is payment diversion aimed at conveyancing completions, timed for late in the week so that completion monies are in client account and the theft is not discovered until the following week. The SRA has warned firms about the pattern and about follow-up calls from people impersonating bank fraud teams.

Will HM Land Registry make good a fraudulent transfer?

Schedule 8 of the Land Registration Act 2002 provides an indemnity where a person suffers loss by reason of rectification of the register or a mistake whose correction would involve rectification. But no indemnity is payable where the loss results wholly or partly from the claimant’s own fraud, or wholly from their own lack of proper care, and it can be reduced for contributory fault.

Related entries

• PI claim case study: solicitor conveyancing fraud
• Funds transfer fraud cover
• Social engineering fraud cover
• Insurance fraud
• PI vs cyber insurance boundary

This entry is part of the Apex Insurance Wiki. Last reviewed 2026-08-22. Next review: 2027-02-22. It is general insurance information, not legal advice, and it describes UK market practice and law as at August 2026.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.