Auditor for the State of Iowa, Rob Sand, has issued a warning after learning a city had paid money to scammers posing as vendors. In January of last year, Sand issued a similar warning involving a scam from unknown parties attempting to fraudulently misdirect state and local government entities in Iowa to issuing payments by posing as vendors. In the recent situation, a city learned payments to three legitimate vendors had been sent to bank accounts established by scammers who contacted the city via email. After consulting with experts, officials learned an email account had been compromised and they believe the scammers monitored the account for months and then sent emails with updated bank information that appeared legitimate. Those fraudulent emails contained the logos, contact information and formatting consistent with the originals, but on closer examination it was determined the address of the fraudulent emails varied by the moving of a dot in that address either one place to the left or right. “I strongly advise representatives of all governmental entities to call any vendors to independently confirm instructions received electronically of revised bank routing information,” Sand says. “Do not respond to the email. Instead, use previously held contact information to ensure the appropriate party is reached.” Sand also recommends governmental entities consider implementing a notification of electronic payment to an established vendor email address. This notification should ask vendors to promptly confirm receipt of funds and immediately contact them if the electronic payment is not properly deposited in the vendor account. Any government agency suspecting a scam is required by Iowa Code to contact the Auditor of State at info@aos.iowa.gov or by calling 515-281-5834.
