Technology

Tackling charity fraud and cybercrime

Charity Fraud Awareness Week runs from 18 – 22 October, bringing together leaders in the charity and not-for-profit sectors to talk about fraud and share good practice.

18 Oct 2021 . 2 min read

Key takeaways:

According to UK Finance, financial fraud losses totalled more than £780m in 2020, the year of the global pandemic
Lockdown restrictions led to an increase in internet use at home, with cybercriminals using fears and uncertainty over the pandemic to advertise fraudulent services using bogus websites and scam apps
The average organisation loses 5% of revenue to fraud each year, although about 40% of incidents are not reported to the police
Research by the Charity Commission has found that two thirds of charities think fraud is a major risk to them, but less than 9% have fraud-awareness training in place

Criminals in the UK have been using the Covid-19 pandemic to target victims online. According to UK Finance, fraudsters are using people’s fears over the pandemic to their advantage, advertising fraudulent services for sale online using bogus websites and custom-built scam apps.

And charities, non-governmental organisations (NGOs) and not-for-profits are just as exposed to fraud and cybercrime as individuals. The Charity Commission says two thirds of charities believe fraud is a major risk to their organisation, but that less than 9% offer fraud-awareness training to staff.

In a 2020 report on occupational fraud and abuse, the Association of Certified Fraud Examiners found the average organisation loses 5% of revenue to fraud each year. About 40% of these incidents are not reported to the police.

Charity Fraud Awareness Week, starting on 18 October, highlights the practical actions organisations can take to protect themselves from harm and #stopcharityfraud.

Money lost to fraud and cybercrime means less to spend on charitable causes, which can damage vital services and reputations. A sector that is fraud aware and resilient helps to maintain public trust and confidence.

How to prevent fraud

Whether you’re a trustee or a charity board member, an accountant or a volunteer, the organisers of Charity Fraud Awareness Week have shared some practical steps you can take now to prevent fraud and cybercrime. These include:

Applying basic cyber-security measures with the use of passwords, back-ups and regular updates to security software
Starting a regular and open dialogue about fraud with staff
Reviewing fraud controls regularly and making improvements where necessary
Ensuring robust internal financial controls
Practising due diligence in all staff and recruitment matters

Find out more

Charities can find more free resources to prevent, detect and respond to fraud here.

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