Fraudsters have been posing as major construction firms in order to steal hundreds of thousands of pounds in contract payments from clients across the UK.
They send fake letters branded with contractors’ logos and signed in the name of their finance directors to council procurement offices, advising of a change in bank details.
At least three contractors and up to nine councils - including Kent and Glasgow - have been hit by the operation. It is understood that one national retailer has also fallen victim to the scam.
The amount stolen currently stands at up to £500,000, including a payment in excess of £100,000 from Glasgow. But with councils stretching from Somerset to Manchester already hit, Kent Police fraud investigator Martin Bradbeer expects the figure to rise.
He said: “These guys won’t target four or five councils; they will target 20, maybe 50. They only need a few to make hundreds of thousands of pounds.”
Mr Bradbeer said it was relatively easy for the fraudsters to obtain the company-headed paper and the names of finance directors and council officials through the internet and persistent phone calls.
He added that the police were still at a loss as to how some of the details about contracts were obtained, although they do not think it is someone operating from within the construction companies.
“They are sending letters to councils, addressing it to a named person. They don’t always know how much they are going to get but on a couple of occasions they have phoned up councils to chivvy up payment and they know the invoice numbers.”
The criminals then confirm the payment by email, using finance directors’ names but slightly altered email addresses to official company domain names.
Mr Bradbeer said: “The problem is that now councils are coming to the end of their use, they will probably target others.”
He said a bulletin sent to all local authorities by the National Anti-Fraud Network in August had potentially stopped in excess of £5 million being obtained through the scam.
Mr Bradbeer said that it would be tough to recoup the money that had already been stolen, as the criminals were quick to withdraw it from the false bank accounts. He urged councils to stay in close contact with individuals at their contractors to guard against such crime.