Attorneys are increasingly being targeted by various scams, including identity theft, trust account and wire fraud, and phishing schemes. These scams can lead to significant financial losses, reputational damage, and erosion of client trust.
Attorneys, the State Bar urges you to stay informed about these threats and take proactive measures to protect yourself and your clients from falling victim to fraud.
Please see below for details on common scams targeting California attorneys.
Scammers can steal your name and professional identity, which can lead to widespread damages, for you and others targeted by fraudsters.
Details: Scammers may use an attorney’s name and State Bar number to create physical and virtual fake law firms and then disappear with victims' funds or commit other misconduct. Attorneys often face complaints from deceived "clients."
What you can do: You should remain vigilant, regularly monitor your identity use, and report suspicious activities to the State Bar and law enforcement to prevent further fraud. Providing full contact information for your State Bar online attorney profile is also important in preventing fraud. This ensures that members of the public can compare details and contact you to verify they are dealing with the real you and not an imposter.
File a police report with local law enforcement and with federal authorities, such as the US Postal Inspection Service and Federal Trade Commission.
Trust account scams
Trust account scams involve fraudulent inquiries from prospective clients, often from other states or countries, aiming to exploit legal trust accounts.
Why it matters: These scams can leave attorneys with overdrawn trust accounts and liable for fraudulent transactions, impacting their financial stability and professional reputation.
Details: The scam typically starts with a retainer agreement followed by a cashier’s check for a supposed settlement. The client requests a wire transfer from the trust account, only for the check to be revealed later as fraudulent.
Unauthorized changes to wire instructions are a growing threat to lawyers and clients.
Details: Scammers gain access to emailed wiring instructions and replace them with fraudulent wire instructions, leading to significant financial loss. Banks often deny liability, placing the burden on attorneys.
What you can do:
Pre-set wire instructions: Establish and confirm wire instructions with clients beforehand.
Email verification: Double-check the sender’s email address for discrepancies.
Independent confirmation: Always verify new wiring instructions through existing client contact, ideally in person or by video conference.
Insurance coverage: Check with your malpractice insurance provider to determine if wire fraud is covered.
Steps to take if scammed:
Contact your bank: Immediately report unauthorized activity and consider closing the affected account.
Notify law enforcement: Provide a detailed report and necessary documents.
Report to your insurance carrier: Notify your malpractice carrier and determine whether any stolen funds are covered by your policy.
Report to the State Bar: Notify the State Bar that your trust account is closed and/or a new account is opened by updating My State Bar Profile. Notify the State Bar’s Office of Chief Trial Counsel of any trust account overdraft.
Phishing schemes
Phishing schemes are deceptive tactics aiming to steal confidential information from law firms.
Why it matters: Protecting sensitive data and client information is crucial to maintaining trust and avoiding financial losses. Phishing can lead to unauthorized access to accounts, damaging both personal and professional relationships.
Details: These scams often take the form of urgent requests via email, phone, or text, claiming your account is compromised or about to expire. They may impersonate regulators, banks, clients, or law enforcement.
What you can do: Always verify requests for confidential information, especially if marked urgent. If contacted by someone claiming to be from your bank or the State Bar, confirm with the institution directly.
The bottom line: Never click suspicious links, as they can install harmful software on your devices. Report fraudulent emails to the FBI’s Internet Crime Complaint Center and seek guidance from the State Bar’s Ethics Hotline.
