The letters have been sent to everyone who has received a payment from the City Council over the last six years.
A City Council spokesman said that the letters were nothing to worry about and did not need to be acted upon.
“Like all councils we must let people know when we are required by law to share their personal information with government organisations. In this case we are obliged to provide the Audit Commission with details of anyone listed on our creditors’ database as part of its National Fraud Initiative (NFI). This could be someone who has received a council tax or parking fine refund. The NFI plays an important role in protecting the public purse against fraud, overpayment and error.
“If anyone receives one of these letters they do not need to do anything about it, and they certainly shouldn’t be concerned about fraudulent activity. We are simply contacting them to let them know what we are doing to meet our legal requirements.