Using debit or credit cards to pay eCourt filing fees raises a number of potential concerns – some ethical, others practical. For example, is it permissible to obtain a debit card connected to the IOLTA account? If yes, what can practitioners do to protect client funds? Alternatively, if a firm decides that an IOLTA debit card is too risky, what are the logistics for getting reimbursed if the firm advances eCourt filing fees? Is a credit card a better alternative?
Here is some guidance on these issues.
Are IOLTA Debit Cards Permissible?
The Oregon Rules of Professional Conduct do not prohibit lawyers from using a debit card to advance client costs. Lawyers are free to obtain debit cards tied to their business account or their IOLTA account as needed.
Managing the Risk of Using IOLTA Debit Cards
Connecting a debit card to an IOLTA account increases the risk of theft – internally and externally. Follow these suggested steps to protect client funds:
- Keep scrupulous documentation. Every charge must be traceable to a specific client and matter.
- When eFiling documents in the Oregon eCourt system, print the “Envelope Details” screen and retain it as a receipt. On the “Filings” tab, click the icon to view the filing details. The “Envelope Detail” screen includes several lines devoted to communication from the bank, including a total amount and the status of the financial transaction.
- Secure all debit card documentation. Recordscan be kept in paper form or electronically asPDFs. If kept in paper form, lock the records in a filing cabinet or drawer. If kept electronically, use encryption. Encryptioncan be applied to individual documents, file folders, a specific computer, mobile devices, or an entire system. See the following resources for assistance:
- Use your IOLTA debit card exclusively for the purpose of paying eCourt filing fees. This will make it easier to detect theft or data breach.
- Review your debit card statement when it arrives. Match receipts captured from the eCourt system to your debit card statement. If you find eCourt charges on your statement which are not supported by a matching receipt, investigate immediately. If there are non eCourt charges on your statement and you are using the card exclusively to pay eCourt filing fees, contact your bank immediately. In this instance, non eCourt charges would be indicative of theft or data breach.
- Keep the physical debit card in the law firm safe deposit box or under lock and key in the office. If the card is dedicated to paying eCourt filing fees, there is no reason for a firm member to carry it. Briefcases, wallets, and purses can be stolen or lost; a firm member could mistakenly (or intentionally) use the IOLTA debit card for an unauthorized purchase. Minimize these risks by locking up the card.
- Ensure that adequate security measures are in place to protect the firm’s computer system – antivirus software, firewall protection, strong passwords, and ideally encryption – since all card payment activity occurs online. In the event of an unauthorized charge, it may be necessary to bring in experienced IT personnel to evaluate whether an external data breach occurred.
- Talk to your bank. If you anticipate a high volume of transactions, alert your bank professional to avoid a hold being placed on your account due to suspicious activity. Make sure the bank understands this is not a typical debit card account. Inquire if there are any risk management or loss prevention measures offered in connection with your IOLTA debit card.
- Determine how many IOLTA debit cards are needed. If you maintain separate IOLTA accounts for specific clients, each IOLTA account may require its own debit card. In some respects, this will simplify recordkeeping, because transactions will be segregated by client. On the downside, multiple cards represent greater exposure to loss and can lead to increased human error – such as mistakenly using Client A’s debit card to pay Client B’s filing fee.
Alternatives to Using IOLTA Debit Cards
If you are risk averse to exposing IOLTA funds to theft or loss, consider one of these alternatives:
- Obtain a business debit card tied to your business account. Use it to pay filing fees and treat the expense like any other cost advanced on a client’s behalf. [See the discussion below.]
- Obtain a business credit card. Use it to pay filing fees. When the credit card statement arrives, pay the balance due from your IOLTA account – if you have the funds on deposit – or pay the balance from your business account and treat the expense like any other cost advanced on a client’s behalf. [See the discussion below.]
- If you choose one of these alternatives, take care to keep your business debit or credit card safe and secure.
The Logistics of Getting Reimbursed
At the moment a law firm uses its own credit card to pay an eCourt filing fee, it is advancing a cost on the client’s behalf. The firm can post the cost advanced immediately to the client’s account and bill the client according to the terms of its fee agreement. It is not necessary to wait for the business credit card statement to arrive before posting the advanced cost nor is it necessary to pay the business credit card statement before billing the client. The same holds true if a law firm uses a business debit card tied to its business account.
When the client reimburses the firm for the eCourt filing fee, the client’s payment should be deposited directly into the firm’s business account. This will always be true if the client remits a discrete reimbursement specifically for the advanced cost. If the client writes a check to reimburse the firm for costs and replenish the client’s retainer, the client’s payment would be handled differently. Contact your friendly practice management advisors at the PLF for advice or consult rules or other resources such as PLF practice aids and forms or our book, A Guide to Setting Up and Using Your Lawyer Trust Account.
ACH, Oregon eCourt and IOLTA
At the present time, eCourt filing fees can only be paid using standard debit/credit cards. ACH transactions – deducting fees directly from your business or IOLTA account – may be permitted in the future.
All rights reserved – Beverly Michaelis . With thanks to the Oregon General Counsel’s office for their input.