Criminals have already conned millions out of public sector accounts departments using the simple scam.
And now they are turning their attention to private contractors in a bid to swindle cash.
Mandate fraud was exposed during an investigation by Channel 4 News this week.
The scam has hit local authorities across the country and seen the Olympic Delivery Authority conned out of £2.3m.
The fraud is deceptively simple but has already yielded millions for criminals.
Con artists contact contractors saying they are calling from a company that is a subcontractor or supplier.
They often introduce themselves as the new accounts manager at that company and usually give a new phone number.
A few days later they send a letter saying the company’s bank details have changed and all future payments need to go into a new account – which is actually controlled by the fraudster.
When the police catch up with the person who controls that bank account, they invariably discover they are just a “money mule” – someone who allowed their bank account details to be used in return for a small cut.
By the time the “mule” is under arrest, the vast bulk of the funds have usually been transferred into a maze of untraceable accounts only accessible to the real criminal masterminds.
Public bodies were initially hit by mandate fraud after Government policy obliged them to publish online details of their spending.
Fraudsters simply looked up online what companies these bodies made regular payments to and used that information to steal large sums of money.
But now public bodies have wised up to the fraud the scammers are turning their attentions to private contractors.
Police estimate that over £150m has been paid out to fraudsters using the simple con this year alone.