Law firms across the country have been targeted by a scam where an overseas company asks a firm to act for them in a debt collection matter and then uses fake cheques to defraud the firm, according to the NSW law society.
The law society warned of one case in which the debtor company advised of a branch in Australia and had an email from the prospective client indicating that there had been agreement to a part payment of the debt. After the law firm agreed to act on the matter, an envelope arrived by express post with a US bank cheque for US$250,000 in one case and US$470,000 in another.
After these cheques were deposited to the practice’s trust account, the client pressed for payment by EFT to an account in an overseas country, less the practice's retainer fee. This took place prior to the cheques clearing which takes a longer for overseas cheques than for a cheque from a domestic bank.
“In one instance, a practice received scanned PDF documents, including an invoice with an Australian debtor, certificate of incorporation, certificate of quality certification and passport,” the law society said in a warning on its website.
The US bank would not pay out on the cheques in question and informed the law firm that they were not genuine.
“Care must always be taken to ensure that any cheque has been cleared and cleared funds are held in the trust account before it can be drawn against,” it continued. The law society’s website has three examples of emails received by practices regarding the debt scam, which can be viewed here.