Criminals are using open government data to defraud local councils, according to a new report from the Audit Commission.

Local councils are obliged to publish details of any expenditure worth over £500. According to the Audit Commission’s report, that data was used to defraud local councils to the tune of £7 million last year.

One scam involves criminals pretending to be the council’s creditors, as revealed by the open data, and asking the council to change their payment details.

Councils should query any request for a change of payment details via recorded post, the report’s author Alan Bryce told Information Age this morning.

"What any public body should do in these circumstances is to go back to their own original documentation on the company when they are contacted by the [potential] fraudster, and then make contact using those original details by writing rather than by phone," Bryce said. "The reason I say write, rather than phone is that one of the wrinkles in this fraud is that the fraudsters can put intercepts on the genuine phone number of the legitimate company."

Bryce did not reveal how the fraudsters place those intercepts, as public knowledge of the technique might encourage further fraud.

"Because this information is on the Internet, it’s not just local opportunistic fraud from someone around the corner from the town hall," Bryce said. "Organised criminals can access that information and can target organisations on an industrial scale. We know that this style of fraud has hit central government, higher education and housing associations."

Although £7 million had been stolen using this kind of fraud, the report pointed out that £20 million had been saved through awareness of the scam.

The report also detailed other forms of fraud in the UK, such as single person benefit fraud (where a person claims to be living alone when they are not) or student council tax fraud (where a household that is not entirely made up of students claims to be, thus avoiding all council tax). The total cost to the public was £185 million.

"Our report shows fraudsters will exploit any system weaknesses, from an individual’s care budget to a multi-million pound building contract," said the chair of the Audit Commission Michael O’Higgins. "In these tough times councils need to maintain the strongest possible anti-fraud defences to safeguard jobs and services."

Having a better overall picture of council residents can also help prevent fraud. Brent Council built a master database which pulled data from all of its services in order to build up a complete picture of its residents. As a result, fraud control officers have new cross-checking tools at their disposal, helping Brent save £1.2 million by averting single person discount fraud.