This Is Why We Are Careful With Your Money
Transaction money often flows through law firms. This is done both for efficiency in completing the transaction and to provide some comfort to the parties involved, but law firms are no different than any other business and need to guard against fraud when transferring money. This “insight” provides an example of why law firms have cautious procedures when transferring money and why your business should as well.
The Fraud Example
The Law Society of British Columbia recently published the following example of a successful fraud on a BC Law firm.
- The perpetrators hacked the firm's computer, and then monitored the firm's email traffic for some time before making their move.
- As soon as the lawyer was on holiday, the fraudsters appear to have sent an email – directly from the lawyer's own email account – urgently requesting that the lawyer's assistant immediately transfer funds to a client's bank account (in reality, the fraudsters' account).
- Although the assistant diligently attempted to reach the lawyer to confirm the instructions, the hackers intercepted and blocked her telephone calls.
- In addition, they responded to her email request to the lawyer to please telephone her by sending an email, again from the lawyer's account, advising that he was tied up and unable to speak.
- The funds were transferred, leaving the firm with a significant trust shortage.
The Lessons Learned
- If there is any request to transfer funds or any change in payment instructions, consider the possibility that a fraudster is at work.
- Ensure every request is verified through direct, in-person contact with the author.
- Establish protocols for transferring funds and adhere to them.
- Keep up to date with the latest social engineering scams that trick people into willingly paying out money to fraudsters.
Invitation for Discussion:
If you would like to discuss this blog in greater detail, or any other business law matter, please do not hesitate to contact one of the lawyers in the Business Law group at Nerland Lindsey LLP.
Note that the foregoing is for general discussion purposes only and should not be construed as legal advice to any one person or company. If the issues discussed herein affect you or your company, you are encouraged to seek proper legal advice.