Charities warned against suspect donations from fraudsters

Charities have been warned by the independent regulator of charities in England and Wales, to be more vigilant in order to help reduce the risk of donation scams from individuals using compromised credit cards.

The alert, issued by the Charity Commission, comes after it was found that a number of charities have been unintentionally involved in money laundering schemes after accepting unsolicited donations from fraudulent individuals.

Michelle Russell, Head of Investigations and Enforcement at the Charity Commission said: “Fraud is a real threat to charities of all sizes – the National Fraud Authority’s 2013 Annual Fraud Indicator report shows that nearly one in ten charities with income over £100,000 have reported that they have been the victim of fraud in the last financial year.”

Though most donations are genuine, charities can still be the victims of abuse and there are ways of identifying suspicious donations. Charities are advised to be wary of things like:

  • substantially large donation amounts
  • donations that come with stipulations or which involve the transfer of part of the amount to another charity which may be a personal bank account
  • unusual features or complex conditions that surround a donation
  • donations made in a foreign currency
  • difficulty or inability to check and verify the identity of a donor

No matter what their size, all charities are open to the threat of fraud and are advised to take the necessary steps to protect themselves against the dangers of fraud by ensuring they check donations and have strict guidelines and tough financial controls in place to prevent it. They must also be in a position to deal with it if it does occur.

Please contact us if you would like more information and guidance about how we can help safeguard your charity from fraud and other risks.

Posted in Charity News.