Is Your Charity at Risk from Fraud?
One of our insurance provider partners, Case Insurance, have written a brief blog on the subject of preventing fraud in charities. Their piece highlights the £1.9bn cost of fraud to UK charities and then focuses on four key areas; Culture, Strategy & Policy, Risk Assessment and Financial Controls.
We would echo the importance of considering this risk, no matter what size of group you are. At Ladbrook, we have had the unfortunate experience of supporting clients through issues like this. Most groups do not choose to insure for their fidelity and fraud exposures, which leads to some simple questions. Why is that the case and should they?
Each organisation is different and you must consider fraud risks in the way you would consider any others. Think of what would go wrong and then consider the extent of the loss you might suffer. A charity with extensive cash reserves of several million pounds would require more sophisticated risk controls than one that only carries modest sums in disposable monies.
Traditionally, banks will refund money that has been stolen from your account. However, if your own negligence is part of the fraudulent action then this protection may be compromised. Fraudsters are increasingly sophisticated. Many are expertly combining cyber crime capability (e.g. hacking or malware) with traditional techniques, designed to manipulate naive colleagues to divulge sensitive passwords or codes from card readers. An indication of this increasing risk is that high street banks are advertising to highlight how some of these criminals operate. Take for example, Barclays and their scam adverts, which you may have seen on TV recently.
Case offer some solid basic advice on their blog post. We would echo the importance of considering this risk for your voluntary group or charity.