Charities warned of new Gift Aid scam to empty their bank accounts

Howard Lake | 24 February 2005 | News

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• finance

The Charity Commission is warning charities about a new scam in which thieves use charities’ bank account details on Gift Aid forms to take money out of charities’ bank accounts.

The Charity Commission has warned that fraudsters are trying to obtain charities’ bank account details from Gift Aid forms and using this information to set up standing orders, taking funds away from charities and into the fraudsters’ accounts.

Sign, the National Society for Mental Health and Deafness, uncovered the scam when it spotted two new standing orders adding up to hundreds of pounds set up on the charity’s account. It immediately contacted its bank and stopped the standing orders before any money was lost.

The Commission is urging all charities be equally vigilant in checking their bank statements for rogue payments. It also suggests considering using deposit-only accounts for charitable donations.

Almost any charity could be vulnerable since many charities make their bank account details public on their websites, in annual reports or on printed donation forms.

On a related theme of fighting fraud, UK Fundraising would recommend that charities avoid publishing officers’ actual signatures on direct mail appeals and other documents. Instead it is safer to use a different signature or perhaps even a signature or handwriting typeface.

Steve Powell, Chief Executive at Sign, said: “It’s a sad fact of modern times that charities have to constantly fight against clever con artists. We all have a duty to be aware of the forms these scams can take and to take steps to protect charitable funds.”

Andrew Hind, Chief Executive at the Commission, said: “This is a particularly worrying scam because it requires no contact with the charity. In turn, this leaves charities with no opportunity to become suspicious.”

About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale. He is the founder of Fundraising Camp and co-founder of GoodJobs.