Introduction

Fraudsters assume that charities are soft targets and are easy to defraud. While they may be wrong about that and you may have good systems or processes in place, this perception means that you will continue to be targeted by organised criminals whose methods are constantly evolving and increasingly effective. 

Sometimes the fraud is not directed at the charity but involves use of its name and reputation. This is much harder to spot but can be just as important to stamp out given the reputational harm such crimes might cause including the ability to undermine public confidence in charities and charitable giving. 

What is a fraudster?

Fraud is defined as a criminal deception committed by a person who acts in a false and deceitful way. There are a string of offences under a variety of legislation (such as the Fraud Act 2006) and essentially the suspect will demonstrate some form of dishonesty and/or deception.  

Fraudsters and the frauds they commit are constantly evolving and there are literally hundreds of different types of online fraud.

How to avoid hackers?

Make sure you do the basics as you would at home

1. Update anti-viral software
2. Do what your IT tells you to do!
3. Read your organisations IT or fraud prevention policy carefully.
4. Ensure passwords are complex
5. Avoid public WI-FI when working
6. Avoid clicking on suspicious attachments

The last is the real concern for all of us given the sophistication of what is called phishing attacks. Think about how your role works and in particular how you interact with other external organisations so that you are better prepared to spot requests that are out of the ordinary.

• Do you know what to do with a strange request and who to ask internally?
• Do you feel confident to challenge an email from someone (even one appearing to be from a manager in your organisation)?
• Is this email/request coming at a strange time/when you are rushed/suggesting you must act urgently?
• Does the tone/content/spelling in the email seem strange?

Is it all about hacking?

In BDO's 2023 Charity Fraud report, 50% of frauds were not online/hacking frauds but personal attacks by 'volunteers' and others, sometimes bad apples in an organisation. 

Top Tips and questions for preventing / dealing with fraud

Prevention is always better than a cure. It costs far less to prevent a fraud than it does to pick up the pieces, investigate and remedy one which occurs. Here are our top tips for preventing and dealing with fraud. 

1. Take your time when dealing with financial matters (donations and transactions). Speed here is when mistakes can be made and is what fraudsters rely upon.
2. Where possible contact people directly about any financial matter. Phone/Zoom/Teams is a hundred times better than relying on what is supposedly said in an email. If you are transferring money, phone to confirm details and encourage those sending you money to follow your own processes. 
3. Trust your instincts.  Many of you are on the frontline dealing with numerous stakeholders, donors, lawyers, trustees. If something doesn't feel right or look right to you, it probably isn't. 
4. Act quickly when responding to a fraud. This will help to minimise the harm and maximise your options.
5. Don't panic and follow your own internal procedure. Discovering a fraud can be a good thing because you can then do something about it and protect your charity. Do you know now who you need to inform if you suspect a fraud and who you might need to report to externally?

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