by business editor Trevor Sturgess

Firms have been warned to watch out for supplier fraud.

An increasing number have received official looking letters purporting to be from suppliers and advising a change in banking arrangements.

But the letters are the work of fraudsters, according to accounting and business advisory firm KPMG.

The letters on company headed paper state that all future payments should be settled to a new bank account and those details are shown in the letter.

The fraudsters hope the business will update its files and remit payments to that new account.

Kevin Meehan, Kent director at KPMG in the South East, based in Gatwick, said: "We have been aware of a number of cases of this taking place up and down the country and it is a troubling rise in what basically is an old style fraud.

"Often many businesses who have amended a supplier's details do not realise there is a problem until they are chased for payment by that supplier.

"A number of well known organisations have been tricked in this way, with the amounts involved being significant."

Mr Meehan advised firms to confirm any banking changes with suppliers and alert clients, suppliers and contacts about the scam.

He also urged them to look at the bank location and assess whether it seemed appropriate to the supplier.