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Published by Scottish Council for Voluntary Organisations

TFN is published by the Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh, EH3 6BB. The Scottish Council for Voluntary Organisations (SCVO) is a Scottish Charitable Incorporated Organisation. Registration number SC003558.

Covid increase in charity fraud risk

 

Organisations urged to be more vigilant

Fraudsters are targeting hundreds of charities during the pandemic, stealing millions and leaving some on the brink of bankruptcy, England’s charity commission has warned.

More than 645 charities have fallen victim to scams with more than £3.6million stolen since March.

Helen Stephenson, Charity Commission chief executive, has warned that ruthless fraudsters are cashing in by cloning appeals, setting up spoof charities or duping staff into buying fake personal protective equipment such as masks.

Analysis by independent charity Pro Bono Economics suggests the outbreak will trigger a £6.4billion loss of income for charities over the next six months just as demand for extra services – ranging from health to debt advice and social care – piles on costs of £3.7billion.

Fraudsters are also bombarding charities with phishing emails claiming to provide information such as a list of at-risk elderly people in a community who may be in need of help.

The regulator reported cases of charity employees diverting funds into their personal bank accounts and even selling charity equipment for personal gain. In over half of charity frauds the perpetrator was known to the organisation.

Stephenson said: “Sadly the figures we’re seeing are likely to just be the tip of the iceberg. We know that fraud is under-reported and I worry that the pandemic may have intensified that... I’d urge anyone involved in charities to speak out if they see anything suspicious.”

It comes on the launch of International Charity Fraud Awareness Week in which the Fraud Advisory Panel is urging organisations to protect themselves.

The Panel, an independent anti-fraud body, has warned charities to be vigilant over the coming months.

Charities are vulnerable to fraudsters attempting to exploit the COVID-19 pandemic because staff and volunteers are less likely to have had fraud training. A study carried out by the Charity Commission in partnership with the Fraud Advisory Panel last year found that less than a tenth (9%) of charities had a fraud awareness training programme.

Free resources and guidance to help charities protect themselves from fraud are available on the charity fraud awareness hub and Fraud Advisory Panel website.2

David Clarke, Chairman of the Fraud Advisory Panel, said: “It’s never been more important that voluntary organisations are fraud aware, and Charity Fraud Awareness Week is a timely opportunity for organisations to take stock and ensure they’re protecting themselves.

“Fraudsters want to exploit weaknesses exposed by the pandemic, so we recommend all charities are aware of common fraud risks, take time to check what they are being asked to do, and keep their organisations safe.

“Now is a good time for charities to revisit and review controls that may have been introduced as part of their crisis management response at the start of lockdown to see if they need strengthening.

“Everyone involved in a charity, from the most senior to the most junior employees, should be given the skills to recognise the tell-tale signs of fraud, and know what to do if they have concerns.”

 

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