Protect your charitable business from online fraud

As charities increase their digital presence, and undertake more activity online, the risk of fraud and theft should be carefully considered, with sufficient controls put in place to help minimise the risks posed.

With advances in technology developing at an ever-increasing rate, it can provide valuable efficiencies when used properly, however they also come with inherent risks which should be carefully assessed and managed. Fraud and theft are not new to the sector, but the methods used are evolving, therefore you must ensure your internal controls evolve as well to help reduce the risk of being caught out. We have highlighted the most common areas where scammers can target your charitable business below.

Email scams

There has been a significant increase in email accounts being hacked and email chains intercepted, with fraudsters including a link with fraudulent bank account details for payment. It can sometimes be very difficult to distinguish between the genuine and the fraudulent bank details, leading to payments being made in error. Generally, fraudsters use more aggressive and high-pressure language to secure payment prior to discovery.  Time should be taken to read over all correspondence prior to payment and if you are in any doubt over the validity of an email or invoice, contact the business directly for confirmation from a trusted source.

Online payment scams

Due to the level of online payment fraud, many of the major banks now run specific fraud and theft seminars to raise awareness of the issues and how best to protect against them. A ’Take Five’ approach to online payments is advisable where, before any payment is sent, you step back to review all the details of the transaction to satisfy yourself that all is in order.

Online threats

All hardware used within the organisation should be protected from online threats via up-to-date antivirus and malware software. Firewalls should also be set up to help protect against attacks. Professional advice should be sought if you are unsure if there is adequate protection in place. It is now commonplace for business to be done via smartphones, with mobile banking overtaking online banking. All your employees should ensure they have adequate protection on their phones, such as pin numbers, antivirus software and fingerprint and face recognition.

We have also seen many insurance companies offer specific online fraud cover, that may not always be covered in a standard insurance policy. It is worth reviewing your existing cover to see if you have sufficient protection in place.

Fraud and theft within the not-for-profit sector continues to be a significant issue and can cause charities both financial and emotional stress from which it can be hard to recover. If your organisation is unlucky enough to be the victim of fraud you should contact the police, your bank and insurance company as soon as possible to provide the best possible chance of recovering the funds and stopping those responsible.

If you would like advice on any issues affecting your charity, please contact a member of our EQ Charities team via charities@eqaccountants.co.uk or contact one of our offices.