Bad cheque scam: Common characteristics and red flags
Scamsters use a variety of ruses, and although the particulars frequently change, some common characteristics appear that can act as "red flags" for lawyers. These include:
- The client is often located outside of Canada.
- The initial contact is often by email using a free web-based address (e.g. Gmail, Hotmail or Yahoo) and salutations such as “Dear Counsel,” “Good day” and “Dear Attorney,” rather than referring to you by name. The message often says that the person who owes the client money “resides in your jurisdiction” (casting the net wide as the scamster is emailing a large number of lawyers).
- The services required are for a simple matter. The client may be willing to pay you too much for little or no work, and may ask you to take your fees out of the funds paid to you by someone who owes the client.
- The documentation used to support the "client" and the "story" looks legitimate, and the names of real people or companies may be used. The client often sends you a scan of their driver’s license or passport by email.
- Although the client may work with you patiently over a period of days or weeks, the client almost always requires the funds quickly once you’ve received them (because you have to pay out of trust before you discover that the funds aren’t good). The client may urge you to transfer the money electronically outside of Canada, and payment may be to a third-party unrelated to the transaction.
- The funds may be requested just before a holiday or long weekend when you may be rushed or short-staffed and not as careful as usual.
- The funds for deposit into your trust account, whether for payment of an outstanding debt, as part of a purchase and sale or for some other reason, are received quickly and easily. Payment may be received before you even receive a retainer or complete the client identification and verification process.
- Payment is by a (well-made but fake) certified cheque or bank draft (e.g. including holographs, imprints and other security features), money order or stolen cheque with a forged signature, or with the payment details altered. The funds are delivered by mail in an envelope with no return address or one that doesn’t make sense and without a covering letter.
Learn more about how to protect yourself from the bad cheque scam.