Scammers targeting lawyers are getting smarter

MEDIA RELEASE – For immediate use, 19 May 2011

Scammers targeting lawyers are getting smarter

The New Zealand Law Society has repeated its warning to lawyers about an email scam which involves payment of a fraudulent cheque for an unpaid “loan” into law firm trust accounts.

The scam, which typically relies on a large outstanding settlement between two parties, was first noticed in New Zealand in mid-2010. Variations of this scam have continued to target New Zealand law firms and seem to be getting more sophisticated in their approach.

In the past these emails were often characterised by bad English and either sent from common website accounts or those of foreign origin. In recent instances it appears the scammers have adopted a more coherent use of the English language, have started to use New Zealand email addresses and are asking for more logical amounts of money. In effect, the scammers are becoming harder to detect.

Typically initial contact from the scammer is an email asking a lawyer to act on the sender’s behalf in a settlement. The settlement is always for a reasonably substantial amount of money and the lawyer is advised that the only action required is collection from the “reluctant” party. Both parties always happen to be overseas, although one is allegedly normally resident in New Zealand.

Following an exchange of emails, the debtor finally agrees to pay. A cheque usually from a foreign bank is received and deposited into the law firm’s trust account. Shortly thereafter the lawyer is asked to transfer the debt amount less their fee to a specified account, but discovers a week or so later that the original cheque has bounced and the firm is carrying the amount passed on

The Law Society’s Acting Financial Assurance Manager Iain Watson said today that New Zealand lawyers should exercise extreme caution when assessing the credibility of a client and not hesitate in asking the Law Society for advice.

“The more sophisticated scammers get, the more time it takes to figure out if something is a scam,” he said.

“As scammers are becoming more savvy, it is increasingly important to seek advice so that none of these emails slip through.”

Mr Watson said lawyers should seek advice from the Law Society either at its national office or a local branch, and should not hesitate to contact a colleague if suspicious.

ENDS

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