Social landlords are being warned by no less than the social housing regulator about a scam that will make them want to check their landlord insurance policy is up to date and fully comprehensive.
The sector has seen a worrying trend of electronic fraud cases where criminals are finding it embarrassingly facile to illegally divert money away from the landlords and into their own bank accounts. The regulator warns that the criminals are finding it too easy and that the entire sector needs to beef up their security systems.
The scam simply involves the fraudster writing to the social housing organisation claiming to be a construction company already undertaking work for housing company. They basically inform the landlords that they have changed their banking details and ask the landlords to pay money into the new account. Unbelievably the ruse works quite well and already a number of social housing companies have fallen for the scam.
Trafford housing trust in Cumbria are just one social housing group who have fallen for the trick in the county, fortunately in their case the fraudster was caught but an identical incident involving the county council has not yet seen an arrest. Law Devonshires are representing several landlords in similar cases and are surprised at the ease with which the scam is pulled off.
Philip Barden, a fraud investigator at Devonshires, said “It is worryingly simple, 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’. As the knowledge of scams among fraudsters increases so does the number of instances. This is an early warning notice.”