Top tips for protecting against litigation fraud
- Do not panic - Do not immediately comply with the demands of the letter/document, write an angry response, or destroy the letter in the hope that the issue will go away.
- Keep good records - Keep a note of when you received the letter and any accompanying documents.
- Check to see who sent the letter - Research the individual or company to see if they have a website or are registered on Companies House. Search the contact number and/or email address on the Web, does it appear legitimate? Have others taken to the Web to complain about similar scams?
- Look carefully at the content of the letter - Does the letter look legitimate? Are there spelling or grammatical mistakes that might indicate the sender is not located in the UK? Has the sender clearly explained the legal basis of the claim?
- Consider whether you should notify your insurance company that you have received a legal threat - Failure to do so may mean you are not covered in the event that the claim is legitimate.
- If court documents are enclosed, ring the court to be certain they are legitimate - You should comply with any timescales given by the court as a failure to do so could result in you losing the right to defend the claim or further costs incurred/awarded against you.
- Review the situation and the facts - Write down everything you know about the situation.
- Check whether the letter or documents specifies a time by which they expect you to comply with its demands - If the sender expects immediate compliance, and you need time to investigate the claim, consider writing to the sender advising that you have received the correspondence and need time to consider and respond to the claims made. Give them a date by which you expect to be able to provide a response, and keep to it.
- If the letter is from a debt collection agency, check on the Web to make sure they are legitimate - Do not be immediately alarmed by threats to visit you personally. Only county and high court bailiffs have any powers of enforcement. The rest cannot require that you let them in your home/premises.
- Take action - If the letter or documents appears legitimate, take legal advice. This may help determine whether you should i) do nothing more; ii) defend the claim; or iii) prepare for a hearing (if one has been scheduled). Alternatively, if you are satisfied the letter or document is legitimate, call their bluff.
- Contact ActionFraud - If a scam is suspected, contact ActionFraud, the UK’s national fraud and cybercrime reporting centre.
Notable fraud case examples
It's often worth looking at notable fraud cases to see what happened and how we can tell it was fraud.
Case 1 - A member received a call from an individual claiming to be a court bailiff. The individual explained he was calling from the local court and gave details of a claim made against the member’s business. The claimant had apparently secured a court judgment in the sum of £1,500. Bailiffs would be attending his business premises within 48 hours to recover money or goods to the value of the judgment (plus additional bailiff’s costs) unless he paid in full. The member in question was very concerned and promptly paid, in full settlement of the debt.
How to tell that this is fraud - It is the bailiff’s job to enforce an order of the court if the defendant fails to comply with its terms. The most common court order is a County Court Judgment or Judgment Order, requiring the defendant debtor to pay the claimant specified sums, plus costs. Before a Judgment Order can be made, a claimant must make out his/her claim through the formal court claims process. The defendant should have heard from the Claimant before this process begins but if not, will hear from the court at the point the claim is issued, and in the event of a lack of response from the defendant, when a Judgement Order is made. It is very unlikely that a claim would reach the point of enforcement by a bailiff without the defendant’s knowledge and even if it did, the defendant should not consider settling a judgment order without first having sight of it and querying the claim with the court directly. If the claim is legitimate but you have had no prior knowledge of it, we suggest you take legal advice as you may be able to have the judgment set aside, allowing you an opportunity to defend the claim if you wish to do so.
Case 2 - One of the most common claims we hear about on the Member’s Helpline concerns business listings, either in published directories, electronic directories or on websites. Documents from trade directories can appear 'official-looking' asking you to provide or confirm your website, email and other contact details. These often look like simple requests inviting a free listing but the small print can commit you to pay hundreds of pounds for an entry. The listing in the directory is generally worthless.
How to tell that this is fraud - It is always worthwhile to read the small print on any official business documentation, as well as check to see if it looks official. Clear signs it may not be are low resolution logos, spelling or grammatical mistakes, unofficial contact details. It is also worth researching the company to see if they have a website, reviews or are registered on Companies House.
Case 3 - The simplest and most blatant scam is that, without any prior contact, bogus invoices are sent to businesses. These invoices might be for adverts in fictitious publications, or for goods that did not exist, or for any other fictitious service. This is a very crude hit-and-miss approach but a surprising number of victims pay the invoice without question, particularly if the amount involved is relatively small.
How to tell that this is fraud - Ask other members of your organisation if you have had any prior contact with this business. It is also worth checking the letter or email for common signs of a bogus invoice, such as low resolution logos, spelling or grammatical mistakes, unofficial contact details and business details.
Find out more
To find out more information about litigation fraud and how to identify it please visit our hub page. If you need advice about suspected litigation fraud, or a previous case, then our specialist team will be happy to help.