DEVIOUS FRAUDSTER SCAMS NORTH EAST LINCOLNSHIRE COUNCIL OUT OF £22,000

                                              

Grimsby Town Hall where councillors will quiz officers about the scam 

A FRAUDSTER  has successfully swindled North East Lincolnshire Council out of £22,000.

The scam occurred in August when it is thought that an officer in the finance department failed to verify the integrity of a  request for bank details to be changed.

As with other local authorities, NELC is regularly being targeted by fraudsters who seek to  mislead the council into changing a supplier’s bank details to divert funds into their own accounts. 

The crooks are clever and devious. They use technology to hack email addresses plus spoof emails to make them look like genuine ones from suppliers. 

This type of fraud has become increasingly prevalent in recent months with numerous attempts reported.

Having had its fingers badly burned, NELC appears to have learned its lesson.

It was only the vigilance of the finance helpdesk team that prevented a further £32k being paid out in another attempted mandate fraud. 

It is likely that finance officers will be quizzed about the scam at a meeting later this month.

In the meantime, a report seen by the Grimsby News, states: "Whilst any loss to fraud is regrettable, it should be acknowledged that there were over 500 requests for bank account changes in the past two years, none of which was fraudulent."

The document continues: "As the country comes out of lockdown restrictions and we establish a new ‘normal’, fraudsters will continue to exploit weaknesses. 

"It is imperative that, if and where procedures were revised or relaxed as a consequence of the pandemic, these are reviewed to ensure that processes that had been put in place to prevent fraud are still appropriate and being followed."

The report further notes that, as the economy recovers, individuals or families  may no longer require (or be entitled to) the levels of support they have been receiving from the council. 

Should individuals fail to report their revised circumstances, the council may continue to meet the cost of services to the detriment of the taxpayer. 

In particular, the support provided to households to pay their council tax through the Council Tax Support scheme is by its nature is open to abuse. 

Another  significant area of fraud risk is that of Council Tax single residency discounts. 

The council has approximately 76,000 Council Tax payers of whom about 26,000 receive a single residency discount entitling them to a 25 per cent reduction in their Council Tax bill. 

If only one per cent of those receiving a discount fail to tell the authority  that they are no longer entitled to it, this could equate to around £90,000 per year in revenue the council is unable to collect.

NELC says it will continue to work with colleagues in Local Taxation & Benefits "to ensure all  suspicions are referred to investigation, as appropriate, in order to minimise any losses".