A COUNCIL has fallen victim to a scam by bogus recruitment companies - costing taxpayers thousands of pounds.

The fraudsters, who pretended to have placed job adverts, collected more than £21,000 from Lancashire County Council before the fraud was spotted.

Critics said they were 'gobsmacked' that the council was conned, and called for tighter controls.

And County Hall’s trading standards chief admitted: “This is exactly the sort of thing we warn people about.”

The scam has been revealed in a report setting out the council’s anti-fraud measures and special investigations over the past year.

The bogus companies, which claimed to have placed job adverts in national newspapers, sent invoices to the contacts in the council’s HR media team, which is in charge of processing bills.

By the time auditors cottoned onto the scam, £21,336 had already been paid.

Staff were warned about the tactics, and invoices worth another £11,724 were stopped at the last minute.

The county council issues regular warnings about trading standards scams to residents and businesses.

Jim Potts, Lancashire County Council’s chief trading standards officer, said: “We are not immune.

“Businesses, which include local authorities, are constantly being bombarded by scams.

“We have constantly warned businesses about things like this.

"They send demands, which look exactly like real invoices, and hope they are paid by the payments department.”

The fraudsters worked by addressing the 'invoices' to the individual council officer named in other, genuine adverts.

This made staff believe the demands were genuine.

Lib Dem County Coun Charlie Briggs, the leader of Burnley Council, said: "Somebody needs to be taken to task about it as they haven't been doing their job properly.

"I hope these matters will be looked at and the procedures changed.

"I'm gobsmacked this could happen. It's absolutely ridiculous.

"I have my own company and would never pay an invoice without checking the details first."

Ruth Lowry, head of internal audit, described it as a 'sophiscated scam', adding that although fraudsters stole £21,000, almost £12,000 of further payments were stopped thanks to prompt action once the scam was identified.

She said: "We will continue to improve our monitoring procedures to prevent further payments being made to bogus companies."

Details of the crime were passed onto police but the fraudsters have not yet been traced.