Keep Your Guard Up: Bogus Cheque Fraudsters Continue to Target Lawyers

Almost every day lawyers send me copies of emails they have received that attempt to dupe them into acting on a matter involving a bad cheque or bank draft. Some of these messages are clearly attempts at fraud; others can look very legitimate. We have seen some one in which a lawyer is contacted and asked to refer the matter to another lawyer, presumably to fool the lawyer getting the referral.

Thankfully, most lawyers seem to recognize when they are being targeted. But we are still seeing some lawyers that are getting fooled – including one just this week on a collection matter.

The fraudsters continue to come up with new scenarios. One we have seen a few times recently involves the collection of outstanding support arrears. Indeed, several lawyers in Oklahoma were targeted over the American Thanksgiving holiday weekend by this exact type of fraud. The fraudsters pose as a potential client seeking to collect outstanding child or spousal support. They usually say that they have already worked out an agreement with their ex-spouses, but want the lawyer to be involved with finalizing the agreement and handling the payment (for a very healthy share of the proceeds of course). If someone wants to pay you five figures to serve as a cheque-cashing service, your internal “too good to be true” alarm should go off.

Keep your guard up. Make sure your client intake and identification processes are on
high alert. Be on the look-out for frauds involving collections, small business loans and real estate or mortgage transactions loans for commercial purposes. Typically, both the client and the lender institution are new to the firm, and the deals and certified cheques will look legitimate. But they will turn out to be counterfeit, leaving a shortfall in the lawyer’s trust account.

Watch for the common red flags on frauds:

• Client will be new to your firm (or may have retained you previously on a small matter)
• Source of referral is unknown or not recognized
• Client will provide only a cell number
• Client is in a rush to complete the deal
• You will be instructed to disburse the funds to a third party

How to protect yourself: Check out these and other free fraud prevention resources on the practicePRO fraud page (www.practicepro.ca/fraud)

• Download and read Lawyers as targets of fraud: the common misconceptionsto understand the recurring misconceptions that are preventing some lawyers from recognizing potential frauds.
• Download a 90-minute LAWPRO presentation on what frauds look like and how to avoid them. You can access the MP3 (audio) file at http://www.cmcgc.com/DEMO/OBA/09GEN0526T.mp3. The program Powerpoint presentation is available for free download at http://www.oba.org/en/pdf/09GEN0526T.pdf.
• Download copies of our Fraud Fact sheet and distribute them to the lawyers and staff in your office. It contains descriptions of the common fraud scenarios and lists the red flags to watch out for.

Call your insurer if you suspect you have completed or are acting on a matter that appears like it might be a fraud. They can talk you through the fraud common scenarios they are seeing to help you spot red flags and ask the appropriate questions of your client to determine if the matter is legitimate.

Cross posted on Avoid A Claim and LawyerSuccessTips