Payment divert Fraud is a term given to the criminal practise of fraudulently changing the bank account details of contractors causing the payment of legitimate invoices to be paid to an alternative bank account. The practice often involves a business or public body receiving a fax or letter purporting to be from a contractor they are using. This fax or letter may appear to be genuine due to the inclusion of the company logo and information relating to supplier codes and invoice numbers; it will request that the bank account details held by the receiving organisation are changed due to the contractor changing their banking arrangements. If sufficient checks are not conducted upon receipt of such a request then this may result in substantial payments being credited to bank accounts set up for the sole purpose of receiving these fraudulent payments. As several days elapse before payments are found to have been sent to the wrong account the money has usually been transferred or withdrawn.
Public bodies are at greater risk due to their requirement to publish details of their spending over certain amounts under government transparency rules. A recent survey by the Audit Commission identified this as an issue for such organisation, often in the public sector, but could include other businesses.
Since the New Year Lincolnshire Police have been made aware of two such incidents where attempts were made to fraudulently divert payments.
DS Ian JARMAN, Head of Lincolnshire Police Economic Crime Unit, states that “Businesses should have robust measures in place to carry out checks when they receive a notification to change a contractors or suppliers bank account details. These checks should be made directly to trusted persons of the contracted company, not just to who is named on the fax or e-mail. Otherwise you could be paying twice, once to the fraudster and then again to the supplier when the fraud is identified. Thankfully it is very rare that one of these frauds is successful, however Action Fraud should be contacted if you receive such communication”
Action Fraud is available to anyone who thinks that they are a victim of any type of fraud and can be reported on 0300 123 2040 or online at www.actionfraud.org.uk