Legitimate businesses should beware of debt recovery orders, say the authorities, as fraudsters carry out a new tactic. The City of London Police’s NFIB (National Fraud Intelligence Bureau) says that fraudsters are researching, via open source, solicitors and obtaining their Document Exchange (DX) number to aid their frauds. Generally the detail is available on the website content of the target company.
Solicitors communicate using a variety of methods; most have an account with the inter-law firm postal system, DX. This is a cheaper service and allows next-day delivery; an advantage over Royal Mail. The fraudster will choose a solicitor’s firm that is either licensed to recover debt, or just completely falsify a licence and later documents.
A solicitor that may have been deceived, or person purporting to be a solicitor, will go to court and submit a large volume of debt collection forms. It is understood the judge will ask if there is any representation from the companies concerned; normally there is none. The paperwork will receive an official court stamp and is then handed to debt collectors. The fraudsters’ aim is to intentionally target a very large organisation as it’s unlikely to challenge the recovery order – at least before they hand over the money – as the organisation would generally seek to avoid reputational damage. The debt collectors will attend the head offices of the companies with the signed paperwork.
Chief Financial Officers (CFOs) will usually be contacted but the advice is more often than not, to pay the money and appeal later; as companies do not want debt collectors in the reception area threatening to start removing company property. If a company appeals an order, by that time the fraudsters are not traceable.
What can you do? The NFIB advises that firms do due diligence; and make a meticulous check of a debt recovery order.
You can report cases to ActionFraud, the UK’s national fraud and cyber crime reporting centre.
