Are You Being Scammed By Your Client?

It must be a sign of the times. This is the second time in a year that I have heard of a law firm being debunked by someone impersonating a client, or sporting a false identity. What are the repercussions when the firm is fooled? Could it happen to your firm? The simple answer to the second question is yes, it can happen to any firm. The answer to the first question is as yet unclear.

The first instance happened to a PA firm. A settlement in a class action case ultimately resulted in a distribution being made to the client. The firm attorneys dealt with the client by phone, email, mail and fax. The attorneys had never met the individual client in person.

The client arrived to sign the papers and collect the net proceeds. Quite some time after the check was cashed and the remaining paperwork completed, it was discovered that the individual who visited the firm was in fact an impersonator, and not the client at all.

This latest occurrence has happened in another state far away. My counterpart in that state received a hot line call from a partner at a law firm. The partner saw a TV news story about the police arresting a gentlemen for identity theft, and the partner recognized the alleged culprit as a client his firm recently settled a personal injury case for. The firm subsequently learned that the culprit was using a false identity when dealing with the firm. The firm had a copy of the “client’s” drivers license in the file. So, even the state’s motor vehicle department was fooled by the stolen identity. The settlement checks had already been cashed and release of claims filed. The lawyer on the hot line asked, simply, “What do we do now?”

This question was shared with my 19 counterparts in North America and Canada. We all agree that the proper steps are to put the malpractice carrier on notice and call the local police to report the fraud.

More importantly, how does a firm avoid becoming a victim of identity theft or fraud? In a PI case, for example, do you need to get an independent medical opinion to ensure that the person in front of you matches the individual who had the medical xrays, MRI or surgery? In an estate probate matter, do you ask for more than a driver’s license to make sure the beneficiary is who he says he is?

As one of my peers aptly noted, “I already recommend lawyers have photocopies of client’s drivers licenses. To those lawyers who say they would never insult a client and ask for identification, I say caveat venditor*. Unfortunately, lawyers are not immune to identify theft and other scams and must take reasonable precautions to avoid such. ”

*Let the seller beware

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