Charities targeted by increasingly sophisticated scams

24.01.16

The Charity Commission is urging charities to remain vigilant to the continuing threat of mandate fraud and the changing tactics that fraudsters are using to target charities.

Mandate fraud occurs when the fraudster tricks a victim into changing bank account details, in order to divert legitimate payments intended for a genuine organisation (eg a charity supplier) to bank accounts instead controlled by fraudsters. This often involves the fraudster impersonating an organisation representative, either by email, direct mail or telephone communication. The fraudster may also use headed paper and/or the company logo to lend credibility and to gain the charity’s trust.

The threat of mandate fraud is an on-going issue for charities, with cases continuing to be reported to Action Fraud from across the sector.

In recent months, the Commission has become aware of mandate fraud attempts where the fraudster has been able to use the email address of a regular contact at the legitimate organisation to deceive charities into changing change bank details.

The Commission recommends that trustees and charity professionals spend a few moments familiarising themselves with the Metropolitan Police’s mandate fraud advice and ensure that their charity has robust authorisation and monitoring procedures in place for changing bank details and managing payments. The advice is clear – any request to change bank account details is an unusual occurrence and should be treated with suspicion.

As a minimum, charities should:

  • remain vigilant to the continuing risk of mandate fraud and raise awareness amongst those staff and volunteers with responsibility for charity finances – download the campaign posters produced by the Metropolitan Police
  • be suspicious of any change of bank detail requests until independently verified
  • check and verify all requests for change of bank details using contact information held separately by the charity
  • never rely solely on contact information provided in any form of external communication that requests a change of bank details
  • check that a sample of payments has been received by the legitimate organisation after the change of bank details has been actioned
  • do not rely solely on the organisation to inform your charity that legitimate payments have not been received – by then it may be too late to recover the money

If you suspect you or your charity may have fallen victim to mandate fraud, you should immediately report it to Action Fraud