Landlords targeted by electronic con

Criminals are employing a ‘worryingly simple’ trick to steal hundreds of thousands of pounds from housing associations and councils, according to law firm Devonshires and the Tenant Services Authority, which jointly circulated the warning this week.

The regulator confirmed that two landlords were ‘actively pursuing’ the recovery of lost funds following electronic fraud cases. The email alert sent to landlords said there had been a ‘significant number of actual and attempted frauds targeting electronic payment’ in the past few weeks.

Under the scam, landlords are deceived into diverting payments intended for suppliers or tenants into fraudsters’ accounts. ‘It is worryingly simple,’ said Philip Barden, a partner and fraud investigator at Devonshires. ‘If you drive by a development that says [for example] “Kier” you [forge] Kier-headed paper and write to an association to say: “please change our bank details”.’

Cumbria Police last month charged a 35-year old man in relation to an alleged £102,000 fraud at Trafford Housing Trust. Raat Kumar Mani, of Hartley Road, Croydon, was charged on 24 April with seven counts of fraud and one count each of fraudulently setting up a bank account and money laundering. The force is also investigating a separate alleged fraud at Cumbria Council which involved the same ruse, a spokesperson said.

‘A fake letter was sent to both organisations claiming to be from a construction company they both use which had details of new banks,’ he added. No arrests or charges have been made in relation to the county council case.

Larry Gold, director of finance at Trafford Housing Trust, said it had secured an injunction within 24 hours to close the allegedly fraudulent bank account and gain a disclosure order to force the bank to supply details of the account holder.

In another incident investigated by Devonshires, a rogue employee diverted a payment owed to a tenant to their own account. ‘As the knowledge [of scams among fraudsters] increases so does the number of instances,’ Mr Barden added. ‘This is an early warning notice.’

The chief executive of a major association, who did not wish to be identified, said their organisation had prevented an attempted fraud four years ago and that all landlords were susceptible. ‘I was shocked at how often suppliers change their bank accounts so you get these requests often.’

A spokesperson for the TSA said it was aware of recent bids to commit fraud against landlords and their suppliers. ‘These involve attempts to change bank account details to divert legitimate payments,’ he said.