£100,000 scammed from council recovered

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Derry City Council has recovered almost £100,000 after falling victim to a scam earlier this year, it has been revealed.

Council officers yesterday released details of how a payment for £99,426.24 was paid into the wrong bank account after a bogus request was made for a contractor’s bank details to be changed.

I hope we don’t end up on any type of sucker’s list.

Independent Councillor Gary Donnelly

The attempted fraud was only uncovered seven days on from the payment was made on February 17th- after the genuine contractor who was owed the money queried why they had not been paid.

Speaking at the Guildhall on Wednesday afternoon, Council officers told Derry and Strabane District Council’s Assurance, Audit and Risk Committee that additional checks have now been put in place, while an investigation is under way as to how it happened.

They also confirmed that First Trust Bank were immediately contacted when the fraud attempt was uncovered.

The bank began an investigation while the PSNI’s financial Investigations Unit were also contacted.

On February 25th following an initial probe it emerged that the Council “had recently received notification of a change of bank details purporting to be from the contractor”.

A report brought before the committee also stated: “It would appear that the bank details of the company were then changed to those on the letter. When contacted, the company confirmed verbally that they had not requested their bank details to be changed.”

First Trust Bank said the council could get its money back if indemnities were provided.

The indemnity was signed off the following day and delivered to the bank and the full amount of money was returned to the council’s bank account on April 1st.

An internal management investigation is currently under way within the council.

SDLP Councillor Gus Hastings said: “I am glad to see we got our money anyway. I think that’s very, very important.”

He added that the council was also lucky to get the money back, given the amount of people left out of pocket due to being ripped off.

Independent Councillor Gary Donnelly said: “I am glad the ratepayers’ money has been got back.”

He added that there was a list known as a Suckers List comprised of people with a high chance of being caught in scams so they can be targeted in future.

“I hope we don’t end up on any type of sucker’s list,” he said.

UUP Councillor Derek Hussey questioned how long it would have taken the council to uncover the scam if the genuine company had not contacted them over the matter.

A council officer replied that there were very detailed checks and that the error would have shown up within days, with additional controls now added to those already in place.

DUP Councillor Maurice Devenney commended the council officers for the work they have done to ensure the money was recouped, while Independent Councillor Paul Gallagher said that such scams may also land at the door of the new council in the future.

“Whatever procedures are in place, they are only as good as the how they are operating.”