All Posts Tagged: cashier’s check

Law-firm check scams: 5 ways you can help protect your firm

David Pollino

Lawyers beware. A lot of fraud schemes work across industries, but a recent case involving an alleged $8.8 million fraud is a reminder that an age-old scam directed at lawyers is still making the rounds.

Female law associate speaking with her colleagues sitting at a conference table.In a recent case reported by the ABA Journal, alleged fraudsters asked law firms across the country to represent phony companies in legal disputes. After accepting the cases, the law firms were notified the companies had settled, and the law firms then received forged cashier’s checks for purported settlements of the disputes. The law firms cashed the checks, and the phony companies then contacted the law firms asking them to send all or part of the settlement proceeds. Only after sending the proceeds to the scammers did the law firms learn the cashier’s checks were forged.

This type of check scam is as old and as common as Nigerian wire fraud scams. Like other fake-check scams, there are a few easy steps to protect your business from being ripped off:

* Do your due diligence on clients, particularly if they claim to be out of the country or there are generally no face-to-face communications with the client. If you are dealing with a stranger, make sure you have that person’s name, address, email and phone number, and verify those independently using reliable sources.

* Be suspicious of client requests outside your area of expertise. In this lawyer scam, the targeted firm frequently has little or no experience in the type of case the scammers claim to need help with. Ask yourself: Who is this client, what do they need, and is it outside your expertise?

* Wait 7-10 days for a check, cashier’s check, or certified check to clear before using the proceeds. Although your financial institution may make funds available quickly, this does not mean the check is good or has cleared through the issuing institution. Before using the proceeds of a check, confirm with your bank the check has been paid by the issuing entity.

* Be suspicious of a client who insists that you send funds by wire transfer or otherwise pressures you to act quickly. Similarly, be suspicious if the request is to wire funds out of the country. Fraudulent wires, particularly international transfers, are particularly difficult to recover.

* Remember that your deposits are your responsibility. If you have deposited a check that then bounces, your bank may withdraw the original dollar amount from your account. Your financial institution may try to help you recover lost funds from fraudulent checks or wire transfers, but ultimately your business is liable for these types of losses.

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