According to one report over 75% of the Cybercrimes reported were from the “The Friday Afternoon Fraud”. This involves criminals modifying emails directly by hacking into the email system of an individual. By monitoring e-mails they can then determine when a deal is about to be closed. They then alter the client's emails to the attorney or vice versa, altering bank routing instructions so funds go to the criminal.
Such scams often take place on a Friday, as this is the time that many deals are finalized, and the transfer of funds often take place. This also buys criminals additional time to avoid detection. About 25% of law firms have targeted by cybercriminals, with nearly one in ten resulting in money being stolen.
How to detect the Friday Afternoon Fraud or similar e-mail modification scams:
Law Firms, accounting firms and title agencies that hold large sums of client money are most at risk. Even for those who do not hold large amounts of client money, it is worth considering this risk. The following steps that help detect the Friday Afternoon Fraud will also work against other scams.
Basic Steps:
1. confirm client and third party payment details, for example sending $1.00 to the account numbers provided and confirming it has been received
2. provide information to clients confirming they will never be asked by you to send money to a different account than that given
3. be suspicious of requests to change payment details, in particular emails sent at the last minute when closing a time sensitive deal, make sure to confirm these instructions with the client on a previously known telephone number
4. confirm that details for electronically transferring funds provided by a third-party lawyer are actually going to the party intended
These are not the only steps that can be taken but it is a good start. It is worth noting that most of the cybercrimes started with hacking individuals and not systems. Ongoing training of staff is essential.
Make sure that you have the proper insurance coverage. Many errors and omissions insurance policies provide little to no coverage for this type of fraud.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
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