A business rates scam has been doing the rounds again, targeting empty business premises. The scam sees someone register themselves as liable for business rates with the local authority, and pay the bill with a stolen credit card. The fraudster applies with a fake name and company, but they will sometimes register with Companies House to make it seem more legitimate.
After a short period of time, they contact the local authority with an excuse for leaving the premises, such as termination of tenancy, and ask for the business rates account to be closed. They provide their own bank details for the refund to be paid to.
We’ve seen this scam targeting several local authorities around the country (including in North Yorkshire); some in the last few years and others more recently. Thankfully, staff have been vigilant in spotting the scams and noting that things didn’t seem right.
In one recent case, a man registered for business rates at an empty property and gave the registered business address as premises in London. Nine attempts were made to pay the rates with different stolen credit cards. One person whose card was used noticed that an attempt was made to pay for the business rates and contacted the council.
Fortunately that payment did not go through, but this prompted the council to refer the case to Veritau to look further into the matter.
Our investigating officers found that this was a case of identity fraud, where a person’s details had been used to set up a business that does not exist. Another credit card was used to make three payments of £2k each.
Investigators have been able to find evidence to show this same individual has attempted the same scam at other authorities. After the rates were paid, the fraudster contacted the council to say that the landlord had sold the property and they had vacated the premises.
A termination letter was provided, along with bank details to issue the remaining balance on the business rates account. The authority asked for proof that this individual made the original payment, and were sent a photo of the credit card, a credit card statement and passport.
We believe these are fake, as many of the details don’t add up, and there are several spelling mistakes on the statement (e.g. ‘trancation’ and ‘recieved’). The money has not been refunded to this person, and is instead being held in a secure account by the council.
Veritau’s investigation has been able to trace the IP address that the emails were sent from, and this information has been passed to the police and Action Fraud.