Fraudulent Inducement

Today we’re going to talk about fraudulent inducement.

Your business is working really well and you’re making some money and all of a sudden your HR or accounting person comes to you and says, “Hey we’re not getting any invoices from XYZ company.” And you go jeez that’s strange, XYZ company is always on time. And you reach out to XYZ company and they say sure we’ve been paying you on time. In fact, we received an email from your person telling us to change banks. And you’re going, we didn’t change banks! And then you do a little bit more investigation and you’re really confused. So what happened? Well, you might have been hacked. Somebody might have gotten a hold of some email strings that you’ve been sending to clients. And lo and behold, your clients have received an email telling them to change bank accounts. But you didn’t change bank accounts. And now you’re getting worried. Because now your clients are starting to send your invoices somewhere else. So, what happens? Well, unless you have some sort of coverage for that, you’re out of luck. And major league, you’re out of luck. That’s called fraudulent inducement.