- By Kylie Mildwaters
In today’s digital age, scams and fraud are an unfortunate reality. As new laws are being drafted in Australia to enforce more accountability from banks, telcos, and tech giants, it is vital to understand how to protect yourself.
For people on the Yorke Peninsula—especially farming families and rural property buyers who often handle significant transactions—it’s crucial to take every precaution when transferring money for legal fees, property purchases, or other large payments.
A recent ABC article, Tech giants, banks and telcos to face massive fines and compensation for failing to protect scam victims under new laws, highlights how vulnerable we can all be to sophisticated scams.
The story of Ilya Fomin, who lost $280,000 to a scam while purchasing a property, is a stark reminder of the risks involved. “That was such a huge shock,” he said. “It felt like being in a nightmare I couldn’t wake up from.”
When Trust is a Risk: Real-Life Scams in Legal Transactions
It’s a common misconception that scams only target the unwary or reckless. Here on the Yorke Peninsula, we’ve witnessed the devastating impact of scams, even when precautions are in place.
One of our clients lost $75,000 when a scammer intercepted email correspondence between our firm and the client.
The scammer, impersonating our firm, convinced the client to transfer money into a fraudulent bank account under the pretext that our trust account details had changed. Sadly, the funds were lost as the client made the transfer without confirming the changes over the phone.
Scammers target law firms because of the large sums we handle – proceeds from property transactions, settlements, or inheritances.
And they rely on the excitement or urgency of legal matters to make clients act hastily, even if they’ve received security warnings or are usually careful.
How to Keep Your Money Safe: Proactive Steps to Take
To protect yourself from being scammed during a legal transaction, it’s essential to take these proactive measures:
- Always Confirm Bank Details Over the Phone or In-Person
If you receive any communication requesting a payment, always call the sender directly to verify the bank account details before transferring any funds. Never rely on email or messaging alone, as scammers can easily spoof or fake these channels. Use a trusted and verified phone number – ideally one you already have on record or can find on their official website. - Avoid Immediate Transfers – Use Delayed Payment Methods
When transferring money, opt for a method that doesn’t instantly clear, such as a bank transfer that takes 24 hours or more. This delay offers a crucial window to catch any errors or detect a scam before the money is gone. - Follow Your Lawyer’s Advice and Read All Correspondence Carefully
Law firms usually include clear scam warnings in their communications. These may be in bold text, advising clients to confirm payment details or follow specific processes when transferring funds. Read these carefully and don’t let the excitement of your transaction overshadow the importance of due diligence. - Verify All Communication Channels and Be Wary of Red Flags
Scammers can mirror the style, language, and tone of your lawyer’s correspondence to appear genuine. If anything seems out of character – such as a sudden urgency, change in payment instructions, or different tone – verify with your lawyer using a trusted communication method.
The Legal Industry’s Role: How We Keep You Safe
Law firms are acutely aware of the risk posed by scams. Here’s what we do to keep your funds secure:
- Independent IT Security and 24/7 Monitoring
We engage independent IT specialists to bolster our cybersecurity, ensuring that our systems are safeguarded against potential threats and monitored around the clock. - Dual Verification for Trust Account Payments
Payments from our trust account are verified by at least two staff members to confirm that funds are transferred to the correct account. This ensures an extra layer of security for all transactions. - Clear Scam Warnings in All Communications
As standard practice, we issue warnings in our emails and letters to alert clients of potential scams and remind them to verify any payment details with us directly. We encourage all clients to take these warnings seriously.
Working Together to Fight Scams: Clients, Law Firms, and Banks
While law firms, banks, and (soon) tech companies are working together to combat scams, individuals play a critical role in protecting their own finances. Just as you would secure your farm gates or take care with storing machinery, vigilance over your financial transactions is equally important.
The proposed Australian laws will create new responsibilities to prevent, detect, and disrupt fraudulent activities, with fines of up to $50 million for companies that fail to meet their obligations. However, these measures only work if everyone – law firms, clients, and financial institutions – collaborates to safeguard money.
Conclusion: Trust Nobody, Not Even Us – Always Double-Check
In a world where even your email could be hijacked, adopting a “trust, but verify” approach is essential. Even though your law firm may have the highest security standards, the final step of transferring your money safely is up to you.
So, before making any payment, double-check, verify through secure channels, and never rush.
If you have any questions about keeping your money safe or need guidance on property transactions or legal fees, do reach out to us. Remember: it’s better to be safe and double-check than to trust blindly and risk losing your hard-earned money.
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