Cybercriminals hack into law firms’ networks to intercept communications and trick lawyers into redirecting wire transfers to fraudsters. These frauds involve sending emails that appear to come from clients, opposing counsel or other trusted contacts. Traditional red flags — such as a change in payment instructions or spelling mistakes — are rarely seen. Today’s sophisticated fraudsters get in at the front end by providing the initial payment instructions, making secondary verification essential.
Before paying out funds in any matter, verify that the payment instructions your firm received by email are legitimate through direct phone or in-person contact with the instructing party. Use a checklist for every payment to avoid becoming the next victim. If you have fallen victim to a funds transfer fraud, immediately notify your bank and request a claw-back of the funds. Next, contact your cyber insurer and IT department to ensure the fraudster is not lurking in your system, and then report to us. Review our Notice to Lawyers for details of funds transfer frauds and to access additional resources.
Watch this three-minute video by Director of Underwriting and Claims, Michael Mulhern, to learn how to avoid funds transfer fraud.
Clients have also been victimized by cybercriminals, who have impersonated lawyers and their staff by phone and email to redirect client funds to themselves. Inform your clients about this problem. When you provide clients with your trust account information, consider advising them in writing that you will not change it. Encourage your clients to contact your office directly by phone to confirm your account information before sending any funds.
.svg)