• Fraud is likely to increase during the cost-of-living crisis, as seen during the pandemic.
• The Covid-19 lockdown restrictions led to an increase in hybrid working, which cybercriminals used to exploit weaknesses within the company. Now, the cost-of-living crisis presents new opportunities for criminals to use fears and uncertainty to advertise fraudulent services using bogus emails, texts and websites.
• 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 cost-of-living crisis to target victims online. According to James Turley, Customer Awareness Manager, NatWest: “Fraudsters are using people’s fears over the crisis to their advantage, advertising fake energy payments relief and council tax rebates, each using bogus websites and texts to help make the scam evermore convincing.”

And charities, 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.

“As people’s purse strings are tightened amid increasing financial pressures, it will mean charities may be struggling to keep services running even as demand is rapidly increasing and levels of institutional funding and donations from the public are in decline,” says Kaley Crosswaithe, Partner, Forensic Accounting at BDO, in a recent article for Preventing Charity Fraud.

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.

Kaley further highlights the risks faced by the sector. “The challenge facing charities is to mitigate fraud risk and prevent fraud losses that could significantly impact on their ability to carry on providing those desperately needed services. Money lost to fraud and cybercrime means less to spend on charitable causes, which can damage vital services and reputations.”

Charity Fraud Awareness Week, starting on 17 October, highlights the practical actions organisations can take to protect themselves from harm and #stopcharityfraud.

A sector that is fraud aware and resilient helps to maintain public trust and confidence.

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