How the scam works:
With technology today who walks into offices anymore? For that matter, how many of us take the time to make phone calls? Even when you are searching for the “Contact Us” link on a webpage you have to really dig to find their phone number, but what you will usually find is a form of messenger where you can send that company an e-mail.
In fact, many business-oriented people today operate solely by e-mail; especially when dealing with cliental or partners that are out of country. Though convenient and ultimately money saving, this form of communication has opened up so many doorways for both individuals and businesses to be cheated out of time and money.
One of the latest scams going on right now has been targeted at U.S. and Canadian law firms. Don’t be fooled now because we all know that once it hits one nation it will spread like wildfire to the rest of them, so no one is really exempt. For now; however, we will use North America as an example of what is taking place.
Scammers have been contacting law firms via e-mail claiming to be individuals or even businesses outside of North America looking for legal representation to collect money owed to them in said country. Because they are out of country it is not possible for them to discuss things in person, unless needed to by a court order, so they conduct the entire process through e-mail.
The prospective client most often says the money owed to them is from something such as a real estate transaction, tort claim or divorce settlement that was partially paid or not paid at all. Therefore, they need representation in the jurisdiction of the debtor to settle their case. They include all the information and proper documents that the law firm will need to settle the case, it all looks in order and so the law firm assigns a lawyer, or two even, to take care of their new client.
The way scammers pull this off is that the firm, or individual, representing the debtor will agree to pay the outstanding debt and will in turn contact the retained firm and mail a check for the outstanding amount owed. The law firm then contacts another person, usually posing as a bank employee, whose phone number would match the one on the check, and advise that the form of payment is valid.
The firm would then deposit the check into its trust fund or account and wire the money to the professed client. Once the firm’s back realizes that the check came back as a counterfeit it would be too late. Of course, the client would be untraceable because the information they gave the firm was false and their e-mail account is now stagnant or leads to nowhere, this would result in a loss to both the firm and the bank.
How to avoid:
There is always going to be that chance that you might get scammed, but there are some ways to try to prevent this from happening to your business. Obviously businesses must conduct some work through e-mail, but if something is really important to the client then they can make a trip or time to meet with their representation.
If this is impossible the least a business needs to do is to put a hold on all out of country case monies until everything is doubly verified and cleared. This could take a few extra business days and might even irritate some clients, but again, if it matters that much to them what is waiting a few more days going to hurt.
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