February 12, 2018
Quick Settlement Fake Cheque Scam
The Alberta Lawyers Insurance Association (ALIA)  is warning law firms about a fake cheque scam that has recently resurfaced in Alberta. The scam involves a foreign company hiring a law firm to collect money associated with a failed deal with a Canadian company.  However, soon after starting proceedings, the client informs the law firm that a settlement has been reached. The goal of the scam is to have the law firm deposit the settlement cheque into its trust account and pay the money out to the client. Later, the bank informs the law firm that the cheque is bad, and the firm is left holding the bag.

It should be noted that when operating this scam, fraudsters will use the name of a legitimate company and staff member who would deal with this sort of issue. The documentation used will also look authentic and the email address being used will likely be a very close variation of the address used by the company.

Action to be taken:
If you or your law firm receive a request to represent a client in a debt collection –or other similar matter – and a settlement is reached quickly, consider the possibility that a fraudster is at work. Make sure email addresses match those being used by the company. Also confirm how the company received your contact information for this legal matter and confirm the source is legitimate.

You should also satisfy yourself that the client instructions are legitimate through direct, in-person contact with the author via contact information you obtain independently. We also recommend that your firm establish protocols for transferring trust funds (such as waiting for a cheque to clear) and adhere to them
Further, if you receive communications similar to this scam, please send an email to the ALIAlert mailbox and, if possible, provide the potential fraudster’s contact information.

The Alberta Lawyers Insurance Association provides the ALIAlert service to all Alberta lawyers participating in the insurance program. If you believe that you have been targeted by potential fraudulent activity, please contact ALIAlert so that we may alert other members of the profession and avoid losses that increase the cost of everyone’s insurance.