Notice to lawyers
December 04, 2023

Holiday season is an appealing time for fraudsters to try their scams because of reduced staff and added distractions in law firms.

Stay safe this holiday season and avoid becoming the next victim of a ransomware attack by watching this three-minute video by Director of Underwriting and Claims, Michael Mulhern.

Lawyers are also continuing to be hit hard with funds transfer frauds. What should you do? It’s a fact that any time you are transferring trust funds, by any means, in any kind of legal matter, you are at risk and must verify emailed instructions through phone or in-person contact, and using a checklist for every payment will avoid a funds transfer fraud. You must initiate the phone contact with your client, another lawyer or notary by using the original phone number in the file or from a reliable directory. Do not rely on a party calling you to confirm instructions. That call is likely to come from the fraudster. This secondary verification also reduces your indemnity deductible from 35% to 15% of the indemnified loss and costs. Find out more here.

As a side note, your clients are being hit with funds transfer frauds too. Just like you are verifying every payment, your clients should as well. Consider making this clear in your retainer letter and specify a contact in your firm that your can clients call if they receive an email purporting to come from you with payment instructions. Here is what a lawyer advised us happened recently to his client:

In the process of discussing what happened with my client, they advised me that the accountant at their office who was dealing with the wire transfer believed that she had spoken to me last Saturday to confirm the wire instructions. That of course never happened. She had spoken to a fraudster. However, it is very scary because it's clear to me that the fraudsters are aware of our requirement to confirm instructions verbally and are able to work around it by contacting unsuspecting parties.

Follow these steps and keep your clients and your firm safe this holiday season.