A leading councillor has advised people to ignore a service offering council tax payers a reduction in their tax band and a refund on overpayments.

Stevenage Borough Council Lib-Dem leader Robin Parker is urging residents to bin letters from financial claims management company Randall & Vickers which offer the possibility of hundreds of pounds back in return for a 30 per cent cut.

The member for Chells said: “I want people to avoid being taken in by this.

“It is best to recycle these letters immediately. The fact is anyone can challenge their council tax band for free by contacting the Valuation Office Agency.”

He added that a request for re-banding could result in an increase in payments, however.

“It is not automatically a reduction and you could lose out. Other properties nearby may also be affected and similarly if they challenge their ban, then that might affect your band too,” he said.

This was the case in Chells in 2008 when a resident queried their banding and the VOA uncovered hundreds of errors, leading to an increase in council tax for around 400 homes.

“Understandably it caused a lot of anger at the time,” Cllr Parker added.

North Herts residents have also been sent letters offering appeals at a percentage, the district council said.

Howard Crompton, head of benefits, said that while there “appears to be nothing illegal or any misrepresentation in these letters,” residents can appeal themselves at no cost.

He added residents in receipt of council tax benefit should be “wary” of appeals, “as any reduction in council tax liability will be offset by a reduction in council tax benefit.”