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FRAUD ALERT: Large Loss Scam Warnings from the Law Society of Alberta

Two fraud alerts recently posted by the Alberta Lawyers Indemnity Association (part of The Law Society of Alberta) involve scenarios that could also threaten Nova Scotia lawyers:

We've reported on numerous frauds and scam attempts in the past similar to those above:

We bring these to your attention for several reasons.

First, and we do not want to scare you, but you should take appropriate steps to confirm, perhaps by phone, that emailed fund transfer instructions you receive from a client, especially if they seem odd or are significantly different from your original instructions (such as being to wire funds to a foreign country) are correct.

For example, your client is selling their house that has been under agreement for a couple of months. The day before closing they email new bank instructions. Ask yourself who would decide to change their bank the day before closing? It could be that the client had moved to another province and just opened the new account. But if they were always in that other province, or still live here, who would change their bank the day before closing?

Second, social engineering fraud per se is not part of the cyber coverage we offer in our policy and coverage for such a fraud under the professional liability part of your insurance policy will be dependant on the facts. Accordingly, a lawyer who falls victim to such a fraud and who lacks appropriate insurance coverage could be in the position of having to reimburse their trust account for the loss. When there is a deficiency in a trust account, the lawyer has a regulatory obligation to deal with it promptly (see Regulation 10.6) regardless of any insurance coverage.

As always, sensitive personal data and/or banking information should never be shared based on an unsolicited communication. It is best to contact the company, firm or person directly (if by email, without responding to that email), in order to independently verify the sender. Overall, where possible in transactions, use the Bank of Canada‚Äôs Lynx system (formerly the Large Value Transfer System (LVTS)), an electronic funds transfer system that allows large payments to be exchanged securely and immediately.

For tips to avoid being victimized, and to report or seek advice on dealing with fraud and scam attempts, contact Cynthia Nield at cnield@lians.ca or 902 423 1300, x346.