Are you a technology expert? Can you spot a hacker? You may answer no to both of these questions—but when it comes to your ethical obligations as an attorney, you need to be careful because, ultimately, you are the one held responsible for your trust account, even if you are the one who is a victim of an online fraud or scam.
Keep reading as our Chicago business litigation lawyer at Ellis Legal explains more.
Why Are Lawyers Good Targets?
There are a lot of reasons why attorneys are great targets for hackers and scam artists. They handle big-dollar transactions and hold and maintain significant sums of money in trust accounts, and by and large, they are not experts in technology.
Many of the problems come from the fact that funds in a trust account (or any bank account) may be available to use even though they have not been cleared by the bank. That can create a scenario where the lawyer spends or disburses funds and figures everything must be fine. Otherwise, they wouldn't have had access to the money. But that's not true.
Later, when the funds don't clear (such as where the check was counterfeit), the attorney's account—including the attorney's trust account-end up debited for the amount of the check to "pay the bank back."
Common Scams
Many scams are aimed at getting lawyers to disburse funds based on the assumption that funds have cleared when, in fact, they have not done so.
One common scenario is a client who urges a lawyer to help him collect funds or money owed to the client. The funds are sent by the "debtor" to the lawyer, who disburses the funds to the creditor client. But later, it turns out that those funds never cleared, and thus, the lawyer is out the money, and his trust account has been debited.
Often, the recipient of the funds is overseas, somewhere, the scammer cannot be tracked down for the funds or ever found.
Other scams are much more insidious and hard to detect. For example, sometimes, someone gains access to the email address account of a buyer, seller, or creditor. They ask for money to be collected or disbursed, and it is—but the actual creditor or person owed money, was never involved in the transaction; his or her email was compromised by a hacker or scammer.
Look for the Warning Signs
Red flags to detect scams include what you may see as obvious: Clients who can only be contacted by an email address, but you never actually speak to them, significant sums of money are involved in the transaction and the promise of an attorney fee for what seems like not a lot of work.
You should always hold funds in your trust accounts until you get confirmation that the funds have cleared; don't give in to clients that pressure for a quicker distribution. Check with your bank to ensure that they have, in fact, received the funds that you are prepared to disburse.
Ethical problem or issue? Speak with a Chicago business litigation attorney at Ellis Legal at (312) 967-7629 if you have a problem or complaint with the ARDC.