Worldwide, practitioners are falling prey to cyberfraud. The Law Society Gazette reported earlier this year (9 March 2015) that the Solicitor’s Regulation Authority in England was receiving four reports a month about what has been dubbed the “Friday afternoon scams”. (The scammers do this on Fridays because “that’s when conveyancing transactions are completed. The firms come back on Monday and there’s nothing left in the account.”
These sophisticated scammers target mainly conveyancing firms, which generally hold substantial amounts in their trust accounts. E-mails are intercepted and replaced with the scammers’ own e-mails. Sometimes the scammers follow up the e-mails with telephone calls, pretending to be from the bank’s fraud department or asking for verification of a certain electronic transaction and asking for the firm to confirm their online security information.
“Firms are advised to independently validate callers by contacting somebody they already know at the bank, preferably using a separate telephone line, for example a mobile. There have been examples of scammers keeping the line open to intercept any follow-on call to check.”
The Law Society of British Columbia and North Carolina have also recently reported on and warned their practitioners of scams involving the interception of e-mails.
If you are about to pay out trust funds and your client’s payment instructions change, stop and check thoroughly to ensure the new instructions are legitimate. The Law Society has just learned that a BC law firm re-directed sales proceeds that it was holding in trust for a real estate client on revised instructions from someone that the firm believed was the client. Before the firm wired the funds to the client, it received an email, purportedly from the client, directing the funds to be wired to a different account. The funds were sent, but apparently never received. In this case, the email address used by the fraudster was identical to that used by the client, except for one letter….” Extract from a notice from the Law Society of British Columbia.
The situation in South Africa is no different at present. Please see the AIIF’s similar warnings on our website www.aiif.co.za and in previous Bulletins during the latter part of 2014 and early 2015.