Important Message from the Legal Practitioners’ Fidelity Fund
For Urgent Attention: Fraudsters Targeting Practitioners Trust Accounts
(Kindly take careful note and ensure that your bookkeeping staff is notified accordingly.)
Fraud syndicates continue to make attempts to defraud practitioners. The modus operandi is as follows:
- the fraudster deposits a stolen cheque into a practitioner’s trust account;
- the fraudster contacts the practitioner and purports to be an employee of the Legal Practitioners’ Fidelity Fund (to allay suspicion) and explains that the deposit was made in error;
- the fraudster requests that the practitioner pays the money back by electronic transfer, into a bank account which is purportedly a Fidelity Fund account (the account will in fact belong to the fraudster; opened using a stolen ID document)
- the amount credited to the practitioner’s trust account (via the stolen cheque) will be reversed by the bank once it becomes clear that the deposit is fraudulent. If the practitioner did pay out against this deposit s/he will have fallen victim to the scam.
The success of this scam depends upon the fact that the onus is on the practitioner to ensure that the recipient account actually belongs to the payee. When an electronic transfer is made, the bank does not match the payee account number with an account name.
The Fund is not legally empowered to assist practitioners who fall victim to fraud. The Fund is, however, concerned that its name is being associated with fraud attempts and is making every effort to apprehend the perpetrators.
The reality is that scams of this nature are very common (often using the names of respected institutions such as SARS is one example). Fraud associated with banking technology is the fastest-growing form of fraud in the developed world. It follows that, even if the Fund should be fortunate enough to apprehend the current perpetrators, the fraud attempts are likely to continue. The scale of these attempts is of such magnitude that there is a high probability that every practitioner will, at some stage, be approached by the fraudsters. Please be alert to this risk, and review your payment processes to ensure that your practice does not fall victim to fraud.