As of late, law firms are becoming targeted more and more by scammers hoping to accomplish wire fraud. In the United States alone, the FBI has reported that $750 million has been lost in this kind of schemes.
Wire fraud can affect any law practice, but those in real estate law are particularly susceptible to these scams. Scammers attempt to divert sellers’ proceeds and buyers’ incoming funds regarding closings.
The wire fraud scheme isn’t new, and over time several common variations have developed. In one favorite version, a fraudster intercepts an email containing wire instructions and changes the content of the email and the wire instructions in the email attachment to benefit the scammer. In another variation, the fraudsters email the closer directly posing as the seller and asking them to wire the proceeds to a particular account.
Our team has seen too many victims of wire fraud, and we want to help. That’s why we’ve compiled a list of safety measures your firm can enact to reduce the chance of wire fraud.
Here are the best practices that can protect your firm and your clients from falling victim to a wire fraud scheme:
- Set up the second step of verification before submitting any payments. By picking up the phone and calling a number that you have previously verified can help eliminate fraud. Are the account numbers accurate? A simple phone call with the other party could prevent a costly mistake.
- Ensure only specific users have access to accounts. By eliminating the unessential users, we can reduce accidental wire fraud. If possible, even segregate duties, so that one firm member does not have all the control on the impending transfer.
- Always double check who an email is from if the request seems unusual. Fraudsters can easily impersonate even your most trustworthy clients.
- Use a verification process via phone when setting up payment instructions for a new client or making changes to a current client’s instructions.
- Train your staff. Knowledge is power, and it’s essential that your team is aware of the warning signs of wire fraud. Through education, your staff can quickly become your firm’s best allies.
Protecting Your Firm
In a perfect world, there would be no risk when it came to conducting wire transfers. But until that happens, it’s essential that your firm is aware of wire fraud and takes steps to lessen the threat. Through education and instating proactive protocols, you are doing your firm and your clients a great service by reducing the possibility of wire fraud.