February 17, 2022
Social Engineering Fraud Results in Large Loss

ALIA has received a report of a social engineering loss of over half a million dollars and is reminding our Subscribers to be vigilant to these fraudulent attacks, which continually target Alberta lawyers.

Reports of attempted social engineering scams and cybercrimes against Alberta lawyers are common. Social engineering uses targeted, fraudulent emails or other communications to dupe a lawyer, law firm, or client into performing an action such as transferring funds to a fraudster's bank account. Fraudulent email communications can be sophisticated and coincide with the planned transfer of client funds. Often, a client or another party’s email is hacked to divert payments from funds in trust.

ALIA strongly recommends that Subscribers discourage or eliminate accepting banking details or wire transfer instructions via email. Subscribers should confirm with their clients that email should not be used to communicate banking instructions or changes unless they are confirmed by telephone via a known number, video conference, or, if possible, in person. Payment instructions from other parties should also be verified with them or their counsel, as appropriate. Taking these steps is an effective tool to prevent social engineering fraud. 
ALIA recommends that Alberta lawyers purchase cybercrime coverage and social engineering coverage to protect themselves and their clients from cybercrime and social engineering fraud. ALIA’s indemnity program covers Subscribers against negligence and misappropriation under the terms of ALIA’s group policy. However, the group policy does not provide coverage against cybercrime or social engineering.

As previously advised in Cybercrime and Other Data Breaches: Protect Yourself and Clients with Insurance Coverage, ALIA has made it easier for Alberta lawyers to purchase cybercrime coverage and and social engineering coverage. ALIA has arranged with its broker, Aon Reed Stenhouse, to make available a robust cyber policy called the Beazley Breach Response Policy, which is available for Alberta lawyers to purchase. For more information on buying this cybercrime coverage, please email [email protected].

Cybercrime coverage can also be obtained from most commercial brokers or the Canadian Bar Insurance Association/Lawyers Financial, and the Canadian Lawyers Insurance Association. However, it is important to note that cybercrime policies vary and not all policies provide the same coverage.

For a general summary of cybercrime risks during the pandemic and steps that may be taken to help protect yourself and your clients, view Alberta Firm Targeted by Trust Account Scam

ALIA remains grateful to Alberta lawyers and firms for their continued reports of potentially fraudulent activities.

ALIA does not provide legal advice. ALIAdvisory notices, ALIAlerts and the content on ALIA’s website, notices, blogs, correspondence and any other communications are provided for general information purposes only and do not constitute legal or other professional advice or an opinion of any kind. This information is not a replacement for specific legal advice and does not create a solicitor-client relationship.

ALIA may provide links to third-party websites. Links are provided for convenience only; ALIA does not vet or endorse the information contained in linked websites or guarantee its accuracy, timeliness or fitness for a particular purpose.

If you believe you have been targeted by potentially fraudulent activity, please contact ALIAlert.