The following is an excerpt from a fraud alert recently posted to the Lawyers Indemnity Fund website (a division of the Law Society of British Columbia), with a scenario that could also threaten Nova Scotia lawyers:
“This week, the Land Title and Survey Authority discovered two attempts at title fraud in which the fraudsters impersonated registered owners who live abroad, one of which was successful. Further details are available in the LTSA notice.
The risk of fraud is high right now. With a hot real estate market and increased reliance on technology due to the pandemic, fraudsters look to take advantage of those who have lowered their guard. While the frauds detected by the LTSA affected owners and property managers responsible for renting homes, similar fraud attempts have been made against lawyers … Be on alert that fraudsters have tried to persuade a lawyer to let them choose the agent, who ends up being part of the scam. Don’t fall for it. You should choose the agent and have direct contact with the agent both before and after the verification process.
Even where you choose the agent, proceed with caution. Fraudsters sometimes pretend that they met with the agent and obtained the verification documents when they did not. Instead, they or someone who is part of the scheme impersonates the agent and provides phony verification documents.“
Review the NSBS Regulations made pursuant to the Legal Profession Act, S.N.S 2004, c.28, including 4.12: Cash Transactions; and 4.13: Client Identification.
Before you open a new client file, be vigilant with every request for services that you receive. Fraudulent requests for services can be made by email, paper mail and courier, as well as individuals who arrive in person to retain you and use your trust account to receive and disburse funds. Be cautious with all cheques received, especially if they exceed an agreed upon amount. When in doubt, contact LIANS for more information on current reported scams and how to avoid them. Remember that you must always confirm a prospective client’s identification in accordance with the Anti-Money Laundering (Client ID) Regulations of the Nova Scotia Barristers’ Society.
In order to avoid fraud in real estate transactions, it is prudent to confirm the legitimacy of the letter with the financial institution that had prepared the letter. If you decide to proceed with a transaction, be sure to go to the bank website to verify branch transit number, address and phone number on the cheque. Wait until the bank confirms that the funds are legitimate and are safe to withdraw from the deposit. Where possible, use the Large Value Transfer System (LVTS), an electronic funds transfer system that allows large payments to be exchanged securely and immediately.
To report or seek advice on dealing with fraud and scam attempts, contact Cynthia Nield at cnield@lians.ca or 902 423 1300, x346.