Charities told to “strengthen defences” against fraud

The Charity Commission for England and Wales has warned trustees and donors to “strengthen their defences” against charity fraud by reviewing their financial controls.

The warning comes as Charity Fraud Awareness Week runs from 19-23 October.

This year’s event focuses on the coronavirus pandemic and the remote working environment that has been created as a result.

Launching the annual initiative, the regulator revealed that it has received 645 individual reports of charity fraud since the start of the pandemic in March, costing the sector £3.6 million in financial losses.

It is believed that home working is a major driver of the increased fraudulent activity, with remote working and virtual activities and sign-off processes creating an environment that enables charity fraud.

Fraudsters may also be preying on people’s “fears and anxieties”, said the Commission. It highlights one example where a fraudster used a story of personal struggle during the pandemic to “pressure a charity into making a payment quickly”.

Financial hardship among the nation may also be pushing more people into committing crime and fraud, the regulator added.

Strong financial controls, however, could go a long way in preventing fraud. With around two thirds of charity frauds being picked up by audits, simple checks and controls could be “key to disarming fraudsters”.

Commenting on charity fraud, Helen Stephenson CBE, Chief Executive of the Charity Commission said: “We are seeing evidence that opportunists may be taking advantage of charities during the pandemic and I urge all charities to be extra vigilant against fraud.

“When fraud hits charities, its impact is felt far beyond the balance sheet – it is people that are let down, often hard-working volunteers or people in desperate need. That’s why I’m urging all trustees to take action now, to protect their charity’s valuable funds and assets.”

To find out how to prevent charity fraud, please click here.

For support and advice strengthening financial controls in your organisation, please get in touch with our expert team today.

Posted in Blog, Charities, Scams.