Fraud is a serious threat to any organisation, including charities, and is estimated to cost the sector £2.3bn each year. In this piece for Charity Fraud Awareness Week 2018 we look at three warning signs that may indicate donation fraud.
1. Look out for small donations
If you find small, seemingly random donations of £1 or less begin to appear this could indicate fraudulent activity. This is because criminals use this method to test stolen credit cards. Look out for these tiny transactions, and ask your bank what automated tools they have in place to detect such activity.
2. Do your due diligence on the donor
A common tactic among frausters is to set up – or pose as a charity – that in reality may not exist. Or they may misuse the name of an already established charity in order to gain your trust. If an unfamiliar individual is attempting to engage with you, especially if they’re reaching out to donate, be vigilant. Look them up on LinkedIn, and check their registration number on the Charity Commission website.
Be vigilant of fraudsters posing as a charity that may not exist
3. Be wary of unusual donation conditions
A donor may offer a large sum of money on the condition that the charity sends half of the money to another organisation in the first instance (which so happens to be the “donors” personal bank account). This is a documented scam and can see the charity be unwittingly involved in money laundering or other offences. Look out for unusual requests and conditions that may come attached to large donations.