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We are writing to inform you about a concerning increase in wire fraud targeting lawyers who practice in areas other than real estate. Historically confined to real estate closings, these scams have expanded to encompass various practice areas. Falling prey to these scams can expose you to malpractice claims and ethics complaints.
How Scammers Are Accomplishing These Fraudulent Schemes:
Scammers are employing increasingly sophisticated methods to trick lawyers into transferring funds to fraudulent accounts. Here’s how they typically execute the scam:
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Email Hacking/Phishing: Fraudsters often gain access to a lawyer's email account or the email account of a client or third party involved in the transaction. Using this information, they craft seemingly legitimate emails requesting wire transfers. These emails may look convincing and often mimic the style and tone of legitimate communications.
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Impersonation of Trusted Contacts: Once the scammers have infiltrated email communications, they may impersonate clients, opposing parties, vendors, or various third parties, providing wire transfer instructions. These instructions may appear urgent and credible, creating a sense of pressure to act quickly.
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Spoofing Email Addresses: Scammers often use email addresses that closely resemble those of established contacts but which contain small variations, such as a misspelled name or a different domain. This can be difficult to spot at first glance but should always be verified.
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Changing Payment Methods or Instructions: Because the scammers have infiltrated the email system, they are aware of payments that the lawyer is expecting to make. The scammer will often contact the law firm and request a change from a check to a wire. Or, if the lawyer was planning to wire the funds and had already received the wire instructions from the intended recipient, the scammer will provide the law firm with new wire instructions.
Red Flags to Watch Out For:
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Changes in Payment Instructions or Method of Payment: Be wary of sudden changes in wire instructions or changes from a payment by check to payment by wire. Remember, the scammer will know all of the details of the transaction or matter and will appear legitimate. Any change in payment method or instructions should put you on high alert.
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Urgency and Pressure: Scammers often create a sense of urgency, pushing for immediate wire transfers.
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Inconsistent Information: Discrepancies in client communications or unexpected requests for wire transfers should prompt careful verification. Look closely at the wire instructions. Is the recipient the named person on the account and is the bank in a location that you would expect for this recipient?
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Incorrect Email Addresses: Scammers will often create an email account with an address that is very close to that of the intended recipient. Often, they will just change one letter or symbol.
Actions to Protect Yourself:
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Verification Procedures: Always independently verify payment instructions through established contact methods. Call a telephone number that you know is reliable. Do not rely on telephone numbers given to you in emails. Those emails could be coming from the scammer.
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Put the Brakes On: If you are being pressured to act quickly, do not be afraid to put the brakes on and give yourself time to confirm that you are not being scammed.
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Call After Wiring: After you send a wire, pick up the phone and call the intended recipient at a reliable number in order to verify that they received the payment.
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Time is of the Essence: When you discover that a wire has been sent to a scammer, you need to immediately call Lawyers Mutual, your bank, and the authorities. If you can catch the fraud immediately, the funds can often be retrieved.
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Educational Awareness: Ensure all staff members are trained to recognize and report suspicious activity promptly. Train all staff not to click on suspicious links and to always call the intended recipient at a reliable telephone number.
By remaining vigilant and implementing stringent verification practices, we can collectively mitigate the risk of falling victim to these fraudulent schemes.
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