Fake Insolvency Service letters used to defraud investors
30 September 2024
More than 300 complaints have been made about fraudsters impersonating Insolvency Service staff this year, it has been revealed.
Victims of previously failed investment schemes are typically sent fake letters purportedly from the Insolvency Service that claim that the Insolvency Service has authorised third-party companies to help with the recovery of funds in exchange for an upfront fee. Real company names are used by the scammers without the owners’ knowledge.
According to the Insolvency Service, those approached by the fraudsters have often lost money on an investment in a company that later entered a formal insolvency procedure. They are asked to pay around 10% of the loss they suffered from the original failed investment and are contacted repeatedly to be asked to transfer money.
The fraudsters claim that the money requested is to cover tax, third-party fees or administrative costs. Transfers are directed to bank accounts in the name of unconnected third parties and limited companies. Victims are told to lie to banks if the transfer is queried.
The letters have featured the government department’s logo and staff signatures, as well as telephone numbers purporting to be linked to the Insolvency Service.
The Insolvency Service has asked the public to help by reporting suspected instances of fraud to them. In August, it set up a ‘scams’ page on its website to help people verify communications and make a report to Action Fraud, the national reporting centre for fraud and cybercrime, if necessary.
Dave Magrath, director of investigation and enforcement services at the Insolvency Service, said: “Fraudsters maliciously tricking vulnerable people into believing they are helping them to recover money will not be tolerated by the Insolvency Service.
“In the last 12 months, we have shut down 30 scammer telephone numbers and a further 24 email addresses and websites. We continue to work with the police and Action Fraud to share intelligence and pursue these offenders.”
