Bad cheque scam

Information and risk management tips relating to other social engineering scams, including phony changes in payment instructions

In the “bad cheque” scam, fraudsters want to steal funds out of a lawyer’s trust account. Instead of robbing a bank, they try to trick lawyers into voluntarily paying out funds. The "bad cheque" scam, a type of social engineering fraud, involves tricking the lawyer into believing (wrongly) that real funds have been deposited into trust. 

By posing as real clients, with real legal matters, they dupe a lawyer into depositing what appears to be a genuine certified cheque, bank draft or money order, or even a regular cheque, into trust. On the strength of that deposit, the lawyer then pays good funds out of trust. After the funds are gone, the lawyer discovers that the apparently good instrument is a well-made fake, leaving the lawyer’s trust account short, overdrawn or both. The details of the scam, including the method of payment, may change as scamsters work to create a story that seems entirely plausible.

How do you protect yourself?

And find out what to do if you suspect a new client may be a scamster, or worse, you’ve been caught


In June 2012, the Lawyers Insurance Fund, Law Society and Continuing Legal Education Society presented a free webinar for lawyers: “The bad cheque scam – don’t get caught.” Video clips from the webinar are available on CLE’s website. View the video.

Law Society publications

The Law Society has published extensively about the bad cheque scam. For convenience, those materials are repeated or summarized on this page and the related hyperlinks. For a complete list of publications relating to the scam and the different ruses, see Bad cheque scam publications.  

The ruses

The fraudsters generally use a particular ruse to trick lawyers. Here are the details of the different ruses reported by the Law Society:

Phony debt collection ruse (includes collecting on outstanding loans, commercial debts and settlement agreements)

Phony debt collection in the matrimonial context ruse

Phony business loan ruse (includes other phony commercial transactions)

Phony real estate conveyance or fake mortgage ruse

Retainer overpayment and refund ruse