As a member partner, ANZ shares their specialist knowledge with useful information and insights about how lawyers can protect themselves and their clients from frauds and scams. This topic formed a series of national seminars, and for those who missed them, this short article provides resources and insights into this pertinent topic.
Lawyers are increasingly being targeted by scammers in New Zealand and around the world due to their handling of confidential client data and the perception that they hold large sums of money for clients. Falling victim to scams can result in substantial financial loss and reputational damage.
The Law Society, in partnership with ANZ, delivered a series of sessions across the motu about frauds, scams and cyber threats impacting the legal profession and wider community and how to prevent them.
The sessions, which started in July and ran until September, provided information on how law firms are being targeted and how to keep your company, your staff, and your clients safe from malicious actors.
“Scams are on the rise and are increasingly complex in nature with the majority starting online, via social media and search engines, including through paid and promoted content”
John Sheddan from Gore firm Sheddan Pritchard Law, said the seminar was a timely reminder of the form and scope of these attacks, and the risk that all lawyers and business owners face daily.
“An active cyber-attack could bring your practice to an absolute halt, ignore this threat at your peril!” he said.
For those who were unable to attend a session, below is some useful information on what to look for and how to prevent becoming a victim of a fraud or scam.
Scams are on the rise and are increasingly complex in nature with the majority starting online, via social media and search engines, including through paid and promoted content.
The Law Society has previously provided guidance to lawyers about scams and how to recognise them:
However, as the techniques scammers are using constantly evolve, it’s important to keep up to date.
There are two key fraud and scam scenarios that are currently seen in the legal profession. These are:
Email spoofing is a deceptive technique to make an email’s display name and address appear that it is from a trusted source. This could look like a lawyer receiving an email from a senior leader in their firm, urgently requesting a funds transfer for a client’s emergency settlement. Closer inspection reveals small discrepancies revealing the email is fake.
This scheme involves fraudsters penetrating a law firm’s IT system. One way a fraudster might do this is by claiming they are interested in buying a house and intend to use the law firm to do the conveyancing. Emails are exchanged and eventually the fraudsters send an email with “important documents” attached. These are locked and access requires the lawyer to enter their email address and password. The law firm’s information is then harvested giving the fraudster access to the lawyer’s email account. The fraudster then emails the client from the lawyer’s email address to explain that their account details have recently changed, or they send an invoice where the bank account details have been altered. The client then makes payment, and the money goes to the fraudster’s bank account.
There are a number of measures both in processes and technology that lawyers can take to try and prevent scams and frauds including:
“Lawyers need to adopt a balancing act between being available to act, with a healthy amount of skepticism”
The Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 and the Privacy Act 2020 requires lawyers to protect and hold in strict confidence all information concerning a client acquired during the professional relationship. Chapters 8 and 11 of the Rules of Conduct and Client Care outline lawyers’ fundamental obligations in protecting confidentiality.
Rule 4.1 of the Conduct and Client Care Rules (refusing instructions) lists when a lawyer has good cause to refuse instructions. When faced with a potential scam, a lawyer may wish to inquire first about the basis of the introduction – given that the approach will have been unsolicited.
Lawyers need to adopt a balancing act between being available to act, with a healthy amount of skepticism, to avoid becoming a victim of an email scam.
Here are some useful resources:
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