PLEASE ENSURE THIS ALERT IS COMMUNICATED TO ALL STAFF IN YOUR FIRM
Client transaction frauds are on the rise – we have seen a number of matters reported to the Master Policy insurers in the last few months. Collectively, these matters represent a 7 figure sum paid away to fraudsters. Both law firms and clients have made such payments (having received very convincing, but fraudulent, emails).
We suggest your firm takes urgent action now.
Actions to avoid falling victim to fraudsters
- NEVER accept an emailed instruction to change a client's destination bank account.
- ALWAYS seek further verification of that instruction – either call the client or speak to them face to face
- CONSIDER introducing systems and controls regarding payments to bank accounts
- ADVISE clients that if they subsequently change their payment instructions, your firm will not make any payment until instructions have been verified by alternative means
- KEEP discussing this issue with your staff to keep them alert to these threats
Help prevent your client falling victim to fraudsters
- ALWAYS ask the client to call your office to confirm the firm's bank account details if they receive any communication which requests a payment
- PROVIDE the details of the firm's bank account within your letter of engagement/terms of business
- INCLUDE within your letter of engagement/terms of business, a notice to clients stating that the firm's bank account details will NOT change during a transaction; that the firm will not change bank details via email; and that clients should check details in person if in any doubt. Also include this notice as a footer to all firm emails
- DON'T deviate from this practice – you are more likely to be held liable, at least in part, if you do what you said you wouldn't do and something goes wrong.
- KEEP discussing this issue with your clients to ensure that they are alive to the threats and that they know what to expect from your firm.