What counts
The Law Society’s list includes fraud, cyber-crime, and receipt of trust money from unknown or unexpected sources. A payment-redirection loss, a bank-impersonation withdrawal and an unexplained deposit all fall within it.
Facts and sources for this part
- The Law Society says an irregularity includes fraud, cyber-crime, or receipt of trust money from unknown or unexpected sources. [S6]
What happens if you do not
Failing to report can amount to unsatisfactory professional conduct or professional misconduct, and is also a civil penalty offence.
Facts and sources for this part
- Failing to report can amount to unsatisfactory professional conduct or professional misconduct, and is also a civil penalty offence. [S6]
After a scam, in order
- Contact your bank immediately to report the cyber incident.
- Then contact your cyber insurer and the Law Society’s Trust Account Department.
- Have a clear written procedure for reporting scams.
Facts and sources for this part
- If you have transferred funds or given access to a scammer, contact your bank immediately to report the cyber incident, then contact your cyber insurer and the Law Society’s Trust Account Department. [S8]
- Law practices should have a clear policy and procedure for reporting scams, and should report a trust money scam to the Law Society’s Trust Accounts Department. [S9]
Why speed matters
A prompt report is the strongest answer to nearly any later question. It also gives the Law Society the chance to act while money may still be recoverable. Write down times as you go, tell your supervising solicitor, and do not wait for certainty: suspected irregularities are covered.
Facts and sources for this part
- Reporting trust money irregularities, or suspected irregularities, is mandatory under section 154 of the Legal Profession Uniform Law (NSW). [S6]
- All irregularities and suspected irregularities must be reported to the Law Society as soon as practicable, regardless of the monetary value involved. [S6]
The old cheque scam
A foreign cheque is banked and the balance sent on quickly. When the cheque does not clear, the bank uses the funds of other clients in the trust account to cover the transferred funds. Treat a new client who sends a cheque and wants a fast transfer as a red flag.
Facts and sources for this part
- The Law Society describes an old scam: a foreign cheque is banked, the balance sent on quickly, and when the cheque does not clear the bank uses the funds of other clients in the trust account to cover the transfer. [S5]
Building it into the practice
Keep a one-page procedure with the phone numbers, make sure every person in the practice knows where it is, and rehearse it once a year. A scam on a Friday afternoon is not the moment to look for it.
Facts and sources for this part
- Law practices should have a clear policy and procedure for reporting scams, and should report a trust money scam to the Law Society’s Trust Accounts Department. [S9]