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When it comes to email scams, lawyers are finding themselves in the plaintiff's seat but not as the representative. A widespread scam that targets lawyers and law firms is making them the victims in need of legal assistance.
So far, lawyers have lost as much as $70 million to these scammers since 2009.
The scams rely on sophisticated counterfeit checks and money orders. They draw lawyers in because they mimic the method many law firms rely on to bring in clients.
The story generally starts with an email from a company that needs help collecting a debt or settlement.
In exchange for providing a U.S. collection address, the attorney can collect a fee and is asked to forward the remainder of the settlement to a foreign bank account, reports Wall Street Journal.
A check or money order for the amount of the debt then arrives at the lawyer's office. It's deposited and the balance is mailed to the client.
A few days later the check bounces. Now the lawyer is left to pay the overdraft fees resulting from the over-withdrawal of the account.
This kind of scam can mean a serious fee for lawyers who may deal with settlements of several thousand dollars. But it's easy to avoid.
The scam relies on the lawyer turning over the money as soon as possible which if often before the bank realizes the counterfeit. Holding the money longer can expose the scam before it costs you.
Update your retainer agreements to allow you to hold funds from a check or money order for 10-15 business days before turning it over to clients.
That amount of time should allow the bank to resolve the checks. If the checks are clear then it's no harm to the client. But if the checks are fake then it avoids the problem of owing money when the funds disappear.
Having protection against bounced checks is a good protection against these scams. Even better, improve the way you attract clients so you get more business instead of more hassle.
Some scammers involved in this lawyer-targeting email scheme are currently being indicted around the globe, reports Wall Street Journal. But it still pays to stay on your guard.