Quarter of conveyancers have experienced attempted fraud, while third pay referral fees


Conveyancing: encouraging signs over referral fees

A quarter of conveyancing firms quizzed by the Solicitors Regulation Authority (SRA) have experienced a client attempting to commit property-related fraud or money laundering, new research has revealed.

This frequency suggests that many firms “might be over-optimistic” about the likelihood of encountering similar attempts in the future – three-quarters of firms felt it was unlikely that they would experience it and the SRA found that having already seen it did not make firms any more likely to feel it would happen again.

The results of a thematic review of conveyancing, which will be presented tomorrow to the SRA’s regulatory risk committee, follow visits to 100 firms to discover how the service was delivered, marketed and charged for.

It highlighted the need for more training on fraud at firms, with a third of firms admitting they did not know how to decide whether to report a suspicion to the Serious Organised Crime Agency, with a further 15% going only on ‘gut instinct’.

The research found that a third of firms had some for of referral relationship in place – mainly with estate agents – but the SRA said it was encouraged that very few of them reported being reliant on a single referrer, client or development for more than 10% of their instructions.

“It was concerning, however, that around a third of firms felt that others were not being sufficiently transparent with their clients about the existence of referral fees,” it continued.

Firms were similarly suspicious of their competitors when it came to information about costs, with more than half saying that other firms’ publicity was unclear.

On charging more generally, the SRA said: “The majority of firms questioned use the client-care letter and quotation as the main methods of communication of cost information. However, this appeared to conflict with the view that advertising and quote accuracy was the reason for consumers’ dissatisfaction with their final bill.”

Less than half of firms had received service complaints about their conveyancing work in the past two years, while a quarter had professional negligence claims.

Unsurprisingly the SRA concluded that the economic downturn had reduced conveyancing work to levels which affected firms’ financial stability.

“Eight in ten firms reported that the recession has reduced the number of clients for conveyancing work; 40% of firm stated that they have had to make redundancies or implement cost-cutting measures as a direct result of reduced conveyancing work.

“However, despite these affects, firms saw removal from lender panels as a more significant financial risk to the conveyancing activities of their business.”

Tags:




    Readers Comments

  • Firms, of all sizes, are being removed from lender panels, on a daily basis without:

    • Being put on notice that they are being removed. Most are discovering their fate from third parties (i.e. brokers or clients).
    • Being provided with the reasons why they have been removed.
    • Being offered a genuine appeal process.
    • Having the reason for the decision reached after the appeal process has taken place, explained to them.

    All most firms are asking for is honesty, openness and fairness. A standard panel application process (and similar criteria) would also help.


Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blog


How the Oldham community helped my law firm against rioters

On the evening of 7 August, we anxiously watched CCTV footage from outside the building, waiting for the mob. Our blood ran cold when we saw a group of around 150 people approaching.


Essential tips for junior lawyers

Starting out as a junior lawyer can be daunting, with the challenge of balancing the demanding day-to-day responsibilities, honing legal skills, and engaging in profile-raising activities.


What’s your problem? The cause of complaints and how to resolve them

In today’s digital age, where review sites and social media platforms abound, it’s never been easier to vent, and negative feedback can have serious consequences.


Loading animation