Fake Check Scam Hitting Lawyers
By Rick DeBruhl, Chief Communications Officer
June 27, 2011
A Scam Aimed at Stealing Money from Lawyers is Surging Through
Arizona Again
While the details vary, the basics remain the same. Sometimes
the lawyer is contacted by someone who claims to want
representation (often it involves a divorce or business
settlement). At the beginning of the relationship, the lawyer is
sent a check from the alleged client as a retainer. Shortly after
the check has been deposited the client explains that he needs a
portion or all of the money returned (sometimes because the bogus
case "settled" before the lawyer had a chance to take action). The
lawyer dutifully returns the money, only to find out that the
original check has bounced and now the bank wants the funds
returned.
So how does the scam work? Federal law says that when customers
cash a check the funds must be made available, in most cases,
within five business days. You deposit the check today, and the
money appears in your balance tomorrow. However, that doesn't mean
the check has cleared. That process can take weeks. Scammers count
on the time between when the funds are "available" and the check
has "cleared".
Who is the victim? In this case, it's the lawyer. The terms and
conditions of their account at the bank say that deposits are
subject to verification. When the check finally bounces, the bank
goes back to the account holder and demands the money. By this time
the scammer, who is likely in a foreign country, has disappeared
and the lawyer is left on the hook. It's an even bigger problem
when the lawyer's trust account is involved.
There are hundreds, if not thousands of versions of the fake
check scams. Some involve overpayments, while others involve jobs
or potential lottery winnings. Some scammers have figured out that
by understanding the legal process, they can steal from
lawyers.
Protecting yourself is easy. First, be cautious of any
unsolicited checks or emails from new clients who claim to be
working on a large settlement. Before returning any funds, verify
with the bank that the check has actually cleared. Remember, it's
not enough to see the amount show up in your balance. Don't assume
that because a week or two has gone by that the check must be good.
The scammers are good at what they do. Lawyers need to be
especially cautious to avoiding becoming their next victim.
For more information about fake check scams go to:
www.fakechecks.org
www.ftc.gov