Scamming Like It’s 2010 in 2019
History repeats itself. In this case, the original trust account scam has come back to haunt us.
Lawyers Mutual recently received several reports of counterfeit check scams. Yes, you read that right. Fake checks are on the rise again.
What is a Check Scam?
The basic bad check scam attempts to trick a lawyer into depositing a counterfeit check (often a certified or cashier's check) into his or her trust account, then wiring funds to the client. The scam succeeds if funds are disbursed from the trust account before the counterfeit is discovered so that the loss falls to the lawyers.
This scheme has variations targeting different practice areas. Real estate, debt collection, and family law have all be targeted.
Red Flags:
- An unsolicited email from an overseas company you know nothing about or out of state/country client
- A request to handle a matter outside of your normal area of practice
- The client signs and returns the fee agreement without the requested retainer, stating that the fees will be taken from the funds collected
- Fees offered are disproportionate to the work being performed
- The matter involves a hassle-free collection job; there seems to be no need for attorney involvement or for funds to be routed through a trust account
- A package containing funds arrives from an address that does not bear any connection to the parties or places involved in the transaction. Be especially cautious when receiving a package from a Canadian address.
- Discrepancies in contact information - Phone numbers in email or on letterhead do not match website; email domain does not match web domain
Tips:
- Do independent research beyond what the potential client provides – for instance if they give a bank telephone number to verify a check, that could be someone pretending to work for the bank
- Ask the client’s permission to contact the company in question to verify a business relationship exists
- Ask the bank to verify the check rather than immediately deposit and wire funds
- Never provide your bank account or other financial information as this information can be used to withdraw money from your account
- Make sure your firm has proper checks and balances in place concerning trust accounts and that you conduct internal reviews frequently so if someone in the firm becomes a victim of theft, the loss can be detected quickly
- It’s often difficult to locate the individuals involved; however, it’s still helpful to report actual or attempted money offer scams to law enforcement agencies
