Cybercriminals hack into law firms’ networks to intercept communications and trick lawyers into redirecting wire transfers based on emails that appear to come from clients, opposing counsel or other parties related to the matter. Traditional red flags — such as a change in payment instructions, spelling mistakes or reference to a foreign bank — are rarely seen. Today’s sophisticated fraudsters break in and monitor communications, waiting for opportunities. They sometimes get in at the front end by providing the initial payment instructions. Secondary verification of all payment instructions is therefore 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 instruction 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.
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