Charity Commission warns charities of credit card scam

Howard Lake | 28 June 2013 | News

Based on information from the Serious Organised Crime Agency, the Charity Commission has alerted charities to a credit card scam and is advising them to look out for suspicious transactions.

The scam involves a fraudster contacting a charity to let them know that they will donate a large sum of money. They will do this, however, only if the charity sends half of the donation to another specified charity. This turns out to be the personal bank account of the fraudster. The 'donation' is made using a stolen or compromised credit card. If the charity falls for the scam it will unwittingly have become involved in money laundering.

Warning signs that charities should look out for include

• unusually large amounts
• conditions
• complex banking and transfer arrangements
• or a donation which in reality is some kind of loan.

Michelle Russell, Head of Investigations and Enforcement at the Charity Commission said:

“Fraud is a real threat to charities of all sizes – the National Fraud Authority’s 2013 Annual Fraud Indicator report shows that nearly one in ten charities with income over £100,000 have reported they have been the victim of fraud in the last financial year. Whilst this year’s report only sampled charities with income over £100,000, this is not to suggest that smaller charities do not experience fraud, as we know they do.

"It is vital that all charities, whatever their size, do not become complacent and ensure they have financial controls and policies in place to both prevent fraud occurring, and deal with it when it does happen. Most donors are honest and genuinely want to help charities, but we need to be vigilant and stop the fraudsters.”

If charities have concerns about a suspicious donation, they should report this to Action Fraud and the police. Charity trustees should also report serious incidents to the Commission as soon as they suspect them.

Image: Credit card fraud by nobeastsofierce on Shutterstock.com

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.