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LAWPRO Tales of Horror: A U.S. court decision on a a bank’s duties to a firm in a bad cheque scam

October 28, 2013 By: TimLemieux Category: Fraud prevention


Getting into the spirit of Halloween, over the next few days our posts will feature a series of scary stories on claims and claims prevention.

Lawyer Ethics Alert Blogs has a post describing an Illinois appeals court case in which the court ruled that a law firm had no recourse against its financial institution in a counterfeit cheque matter.

While the laws dealing with financial institutions in the U.S. are different than here, the takeaway for Ontario lawyers is to make sure they’ve read the fine print of the contract with their banks (and of course, learn how to recognize the red flags of these scams). While LAWPRO counterfeit cheque coverage may offer a measure of protection if a lawyer is victimized, there is still the chilling prospect of having the bank demanding that a trust account shortfall resulting from a fraud be made good.

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