This alert from the Charity Commission provides information and advice to charity trustees, employees and volunteers to help prevent falling victim to insider fraud.
Insider fraud is committed by someone involved within your charity, whether a trustee, an employee or volunteer. The National Fraud Intelligence Bureau (NFIB) has released a national alert highlighting the insider threat from fraudsters and cyber criminals.
Their alert identifies that over 50% of organisations have suffered an insider threat attack in the previous year and that 90% of businesses feel vulnerable to a cyber-attack from within their own organisation. Charities are as vulnerable to insider threats as the private or public sector.
NFIB highlight that insider fraud poses a greater threat than external fraud due to differing access levels to proprietary data and knowledge of an organisation’s inner workings.
NFIB warn that insiders with access to confidential data can utilise basic operating system functions to steal data from organisational systems. Incidents sometimes go undetected due to lack of proper auditing or data control measures.
Charity Commission research about insider fraud found these crimes were enabled because of:
- poor challenge and oversight
- no internal controls or, where controls did exist, not applying them consistently
- too much trust and responsibility placed in one person
You can read our guidance to help you protect your charity from fraud. This includes insider fraud prevention advice and information about cyber-crime.
Protection and prevention advice
- when stored electronically, access to sensitive files should be restricted to relevant staff only. You should also consider encrypting the documents
- monitor your employees for abuse of IT systems. Minor misdemeanours have the potential to escalate to serious frauds if they go undetected
- have clear policies and procedures in place for dealing with fraud and ensure that that all of your staff are familiar with them. Make it clear that any criminal breaches of your policies will be reported to the police and other relevant authorities
If your charity has fallen victim to insider fraud, or any other type of fraud, you should report it to Action Fraud by calling 0300 123 2040, or 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
Serious incident reporting helps the Commission to assess the volume and impact of incidents within charities, and to understand the risks facing the sector as a whole. Where appropriate, the Charity Commission can also provide timely advice and guidance.
Jail sentence for defrauding vulnerable tenants
A Cumbernauld man who swindled two elderly tenants out of thousands of pounds while working for a housing association was jailed on Friday.
25 year old Jamie Ratcliffe used his position to obtain personal information and a bank card which allowed him to steal from the two women aged 69 and 92.
He fraudulently set up online bank accounts in their names, transferred funds from their account into his, and between 1 February 2018 and 27 March 2018 stole over £51,000.
His crimes came to light when each of the women made contact with their banks. One was told there was no money in her account, with the other being made aware of several high value withdrawals of which she had no knowledge.
At an earlier hearing at Glasgow Sheriff Court Ratcliffe admitted committing the offences. He appeared in court for sentencing on Friday and was jailed for 16 months.
Speaking after sentencing Moira Orr, Procurator Fiscal for Glasgow, said: “As a housing officer, Jamie Ratcliffe’s primary role was to assist those in need. Instead of doing so he abused that position in the most dreadful way and stole large sums of money from his vulnerable victims.
“Crimes of this nature are treated extremely seriously by the Crown Office and Procurator Fiscal Service and anyone who believes they have evidence of such offences should have the confidence to come forward and report it to the police.“We would urge all victims of fraud to report them so those responsible are prosecuted and pay for the consequences of their actions.”
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