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Bank Mandate Fraud Warning

Published
20.09.2018

Schools need to be aware of fraudsters attempting to commit fraud by trying to change supplier bank account details.

In this case the fraudster had contacted the school by email, using a disguised email address which made it look as if it had come from the supplier to which the school was due to make a relatively large payment, and asked for the supplier’s bank account details to be changed. The school, believing the email had come from the supplier, then arranged for the supplier’s bank account details to be changed to those quoted in the fraudster’s email. A payment was then made to the fraudster instead of the supplier.

In this instance, the supplier had become aware that their email account had been hacked and contacted the school to warn them. However, it was the day after the payment had been processed and attempts to recall the payment were initially unsuccessful. As the payment had been processed though the Business Service Centre (BSC) at Shire Hall, the Council contacted their bankers who then in turn made contact with the destination bank to establish if the funds were still in the fraudster’s account. The destination bank has confirmed that they have not released the funds to the fraudster, and should be able to be returned to the Council/school.

If a school receives a request to change a supplier’s bank account details it is imperative that the change request is checked with the supplier, using known contact details i.e. not necessarily those quoted on the correspondence where the changes are being requested, before those changes are made or requested through the BSC.

Fortunately, in this case it appears that the funds will be returned to the Council/school and payment can now be made to the supplier’s correct bank account. However, this often is not the case and those funds are lost with the debt still remaining with the supplier. Schools need to be vigilant when receiving any requests to change a supplier’s bank account details. Not to do so can be costly and have an adverse impact on the school’s finances.

 

Janet Bruce (Principal Auditor – Counter fraud)Tel: 01452 328889

email: janet.bruce@gloucestershire.gov.uk

or Carolyne Wignall (Principal Auditor – Counter fraud)Tel: 01452 328887

 email: carolyne.wignall@gloucestershire.gov.uk

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