A U.S. Court Decision on a Bank’s Duties to a Firm in a Bad Cheque Scam

Lawyer Ethics Alert Blogs has a post describing an Illinois appeals court case in which the court ruled that a law firm had no recourse against its financial institution in a counterfeit cheque matter.

While the laws dealing with financial institutions in the U.S. are different than here, the takeaway for lawyers is to make sure they’ve read the fine print of the contract with their banks (and of course, learn how to recognize the red flags of these scams). The LAWPRO counterfeit cheque coverage may offer a measure of protection if a lawyer is victimized (lawyers outside Ontario should check with their own insurers), there is still the prospect of having the bank demanding that a trust account shortfall resulting from a fraud be made good.

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