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Issue 28 | July 2014

LIANSWERS

This newsletter includes information to help lawyers reduce the likelihood of being sued for malpractice. The material presented is not intended to establish, report, or create the standard of care for lawyers. The articles do not represent a complete analysis of the topics presented, and readers should conduct their own appropriate legal research.
Fraud attempts before holidays and long weekends

You should always be vigilant to fraud, but particularly so before a holiday weekend. Scammers frequently target firms just before a holiday weekend, hoping that the extra banking holiday will further delay detection of an attempted scam.

While each case presents slightly different details and scenarios, in bad cheque schemes a lawyer is retained by a bogus client and receives funds into his or her trust account by way of a cheque or bank draft that appears legitimate.

A sense of urgency with the transaction is often implied by the client. As a result, within days of receiving the funds and depositing them to the trust account, the lawyer pays out funds from the account before learning (sometimes many weeks later) that the funds were bogus, the cheque returned and his or her trust account debited.

Scammers frequently target firms just before a holiday weekend, as they know that this is a time when offices are often short staffed and transaction details might not be checked as closely as they might otherwise be. Also, the extra banking holiday will result in delays in the return of counterfeit cheque or bank draft to the firm.

Remember that you must always confirm a prospective client’s identification in accordance with the Client ID Regulations of the Nova Scotia Barristers’ Society.

Be vigilant with every request for services that you receive, not just those received via the Internet. Fraudulent requests for services can be made by mail and courier, as well as by individuals who arrive in person to retain you and to use your trust account to receive and disburse funds. Be cautious with all cheques received, especially if they exceed the agreed upon amount.

If you do decide to proceed with a transaction, be sure to go to the bank website to verify branch transit number, address and phone number on the cheque. Wait until the bank confirms that the funds are legitimate and are safe to withdraw from the deposit. Where possible, use 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, visit the Fraud section on lians.ca, 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.