Charity Commission warns against email fraud

The Charity Commission has issued a warning to be on the lookout for ‘phishing’ emails that purport to be from charity CEOs.

The warning follows an increase in this type of fraud, as reported by Action Fraud UK – the UK’s national fraud reporting centre.

CEO fraud involves the impersonation of a senior figure (usually the Chief Executive Officer), typically followed by a request for a transfer of funds. The most recent reports have involved the targeting of schools, where fraudsters have claimed to be the head teacher or principal.

Charity trustees, employees and volunteers are being told to be aware of ‘requests to your finance department or staff with authority to transfer funds’ which claim to be from a charity’s CEO but are actually sent from a hoax email address.

Phishing attacks are one of the most common forms of cyber-crime, whereby targets are contacted via email, telephone or text message by a perpetrator posing as a legitimate and trustworthy individual.

These targeted attacks have, over time, become progressively more sophisticated and convincing and, according to phishing defence company, PhishMe, have increased by 65 per cent in the last year.

Fraudsters use many tactics to convince victims that they are legitimate, for example including the organisation’s logo or signature within their communications.

They may also call up a charity or pose as a lawyer or regulator and may well pick occasions when the real CEO is on holiday, preventing the financial officer from checking the validity of the request.

Among the advice given, the Commission advises that charities review their internal processes associated with transactions, don’t be afraid to question details and warn staff and volunteers not to click on any links, or open attachments, in emails which appear suspicious.

If your charity has fallen victim to CEO, or any other type of fraud, you should report it to Action Fraud by calling 0300 123 2040, or by visiting the Action Fraud website.

Charities affected by fraud should also report it to the Charity Commission as a serious incident, using the dedicated email address: rsi@charitycommission.gsi.gov.uk

At George Hay, our team take pride in keeping up to date with the latest news and developments affecting the not-for-profit sector. Our experts can help charities and not-for-profit organisations with a wide range of expert tax and accountancy services. For more information, please contact us.

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