Now is not the time to take your eye off the ball, is the advice to charities to counter fraud, from the awareness raising body the Fraud Advisory Panel (itself a charity) Charity Fraud Report 2022. It was launched on Tuesday evening at the Baker Street, London W1 offices of the accounting and audit firm BDO, when guests heard (pictured) from Phil Sapey, counter-fraud manager at Cancer Research UK (featured in the report), Mia Campbell of the Panel, Robb Montgomery, head of counter fraud at Save the Children; and Michael Beckett, CEO of Colchester Food Bank.
In a foreword to the 16-page document, the Panel chair Sir David Green writes: “Take fraud risks as seriously as you can. Use these survey findings to learn from others, and then strengthen your own counter fraud activities.”
The Panel with BDO ran a survey in October 2022 alongside Charity Fraud Awareness Week, the campaign headed by the Panel and run with charities, regulators, the police, umbrella bodies, and other not-for-profits, seeking to raise awareness of fraud and cybercrime against the sector; when a Charity Commission survey was released that stated around one in eight charities (12pc) had experienced cybercrime in the previous 12 months.
Charities were asked whether they had experienced more instances of fraud, or attempted fraud, in the last 12 months compared to the previous 12 months; the report says that responses were fairly evenly split. Some 30 per cent agreed or strongly agreed that they had experienced more instances of fraud, while 39pc disagreed. The report adds: “Interestingly, when asked whether they thought the risk of fraud was going to increase over the next year, the simple answer was yes; 58pc thought the risk of fraud would increase over the next 12 months. Only 1pc thought it would decrease.”
As for what the biggest fraud risk was likely to be over the next 12 months, cyber was cited most often; in particular concerns about hacking, phishing and social engineering attacks that can lead to payment or bank account fraud. As for actual frauds suffered, near half, 46pc of detected frauds were done by a staff member and 9pc by a volunteer. By comparison only 23pc of frauds were by an external party with no connection to the charity.
The survey suggests that financial losses from fraud are increasing. In last year’s survey, 42pc of respondents that had suffered a fraud in the previous 12 months had not suffered a financial loss. In contrast, this year’s results show that of the charities that suffered a fraud, more than two thirds resulted in a financial loss.
You can download the report for free at https://www.fraudadvisorypanel.org/resource/.
More in the January 2023 print edition of Professional Security Magazine.
