Legal organizations across the country have issued alerts, such as this one from The IOLTA Fund of the Bar of New Jersey, warning law firms about scams aimed specifically at IOLTA accounts. The best way to protect your practice and your clients’ money from these threats is by using trust fund software such as CosmoLex to stay on top of your accounts.
Ignorance Is Not Bliss
These scams often depend on attorneys having only a vague idea of what is going on in their trust accounts. For example a common scam is for someone claiming to be your bank calling to say there are insufficient funds in your account to pay a check, but offering you the opportunity to make an electronic transfer to cover the funds. You make the transfer and discover later it went to some mysterious offshore account, never to be seen again.
With software like CosmoLex, you can pull up your trust account information and see that the person calling is incorrect. Even if you have multiple matters in one IOLTA account, you can see the balance and transactions for each matter separately. You can immediately spot the scams because you know their information does not reflect the reality you see on the screen.
Positive Pay To Fight Check Fraud
Another threat common to trust accounts is check fraud. The scammers either take an existing check and alter it, or forge a new check that looks like it was issued by your law firm. They present it to the bank and by the time the check bounces, the culprit is long gone. Since trust accounts can easily contain millions of dollars, the potential loss is enormous.
CosmoLex includes many trust account software features, such as support for Positive Pay. Each day you send a list of checks issued to your bank through a Positive Pay provider. The bank then verifies each check against this list, refusing checks that either aren’t listed or don’t match the entry for that check number. This service has proven to be highly effective against check fraud.
CosmoLex law office management software offers a host of features designed to streamline your firm’s operations and free you up to focus on the practice of law. In addition to billing and trust account management, you get team calendaring, conflict checking, matter-based organization and more.
If you aren’t a current CosmoLex subscriber, sign up now and try the product free.