Protect your charity from the fake ‘CEO’

Despite best efforts, the charity sector continues to be targeted by fraudsters.

Very recently, two brothers were jailed after setting up fake charities to obtain over £450,000 in Gift Aid, claiming to be trustees providing clean water in the developing world. In total £456,000 was claimed against HMRC, of which all but £69,000 was paid out; HMRC is now engaged in confiscation proceedings to get the money back.

Another common fraud still doing the rounds is the impersonation of a senior figure (usually the Chief Executive Officer) with requests for an urgent transfer of funds or the switching of bank accounts for suppliers/contractors. Despite improving controls to prevent such fraudulent activity, clever use of social engineering is proving successful in persuading charity staff to make payments. Rather than a cold-call/email, there’s often a number of lead-in calls/emails to develop relationships to such a degree that charity staff believe that the person they are dealing with is genuine, so when the request for transfers come, it’s believable. Fraudsters might look to exploit holiday seasons when experienced staff may be on leave and there may be temporary/agency staff in post.  

It is critical that you understand the risks of fraud, educate staff in identifying fraud indicators and have the correct processes in place to ensure everyone in your organisation knows how to respond to suspicions.

If you’d like to discuss the risks of fraud, or perhaps want the assurance of an independent review of your current counter fraud processes, get in touch with your usual Moore Stephens contact or our counter fraud specialist, John Baker.


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