Charity Fraud
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What is Charity Fraud?
Perpetrators of charity fraud use deception to get money from people who believe they are making donations to charities. With charities playing an ever-increasing role in society, there is a corresponding need to guard against such a body being the target of charity scams.
There are a number of charity scams that are perpetrated:
- Income-related fraud
- Expenditure fraud
- Property and investment fraud
- Procurement fraud
- Fraudulent fundraising in the charity’s name
- Fraudulent invoicing and grant applications
- Identity fraud/theft
- Banking fraud
- e-Crime
- Gift Aid fraud
- Share purchase and investment fraud (boiler room fraud)
- Mass Market fraud
- ‘419’ frauds
If you are facing a charity fraud investigation or need advice when setting up a new charity, contact us today.
Avoiding Charity Fraud Cases
The Institute of Fundraising has published an online Code of Fundraising Practice that should be considered to avoid charity fraud cases or fundraising scams. Case law highlights the following areas where people have fallen foul of the law and been caught in charity fraud cases:
- Failing to keep separate bank accounts and mixing funds.
- Using fundraising funds for personal use (i.e. personal outgoings or personal business investment).
- Using the identities of legitimate charities without their knowledge for personal gain.
- Using a charities paraphernalia without their consent to fraudulently raise funds.
- Failing to use charitable donations for the specific purpose they were donated on.
Seek professional advice from the outset if you are unsure about how to set up a charity. Ensure that you keep all relevant documents from accountants, banks or solicitors. Such documentation can prove to be powerful evidence to demonstrate your genuine motivation and intention when setting up and operating your charity.
It is advisable to seek legal advice before any police interview on allegations of charity fraud or fundraising scams.
