Be aware of CEO fraud when transferring funds
On 26 March 2018, the Charity Commission published an alert for charities concerning CEO fraud. This is when fraud is carried out by impersonating a senior figure within the charity who subsequently requests the transfer of funds. This is also known as CEO Whaling.
Action Fraud which sits alongside The National Fraud Intelligence Bureau (NFIB) within the City of London Police (and is the national policing lead for fraud) has highlighted an increase in CEO fraud and is asking for businesses and charities to be vigilant and protect themselves.
This type of fraud could be made in the form of an electronic communication (an email which is made to look like that of a Trustee or a CEO) or by telephone with the fraudster posing as the CEO, lawyer or regulator asking for money to be transferred into an alternative and criminal bank account.
The alert provides information and advice to charity trustees, employees and volunteers to help prevent CEO fraud.
The CEO fraud alert from the Charity Commission provides guidance to charity trustees, employees and volunteers to look out for requests to finance departments or to staff with the authority to transfer funds, from a mimicked or similar looking email address, especially if that person is on holiday or has asked not to contacted.
The Charity Commission offers further advice on prevention and protection techniques to CEO fraud, which include:
- Reviewing internal procedures regarding how transactions are requested and approved, especially those in relation to verifying validity;
- Checking email addresses and telephone numbers when transactions are requested. If in doubt request clarification from an alternatively sourced email address or phone number;
- Not clicking on links or opening attachments in unexpected or unusual emails;
- Questioning details when being asked to transfer money at short notice; and
- Ensuring that confidential documents are always shredded before being thrown away.
If a charity has fallen victim to any type of fraud, trustees should report it to Action Fraud and to the Charities Commission as a serious incident by email or by calling 0300 065 2199.
At Hunt & Coombs Solicitors we are able to provide a number of different legal services for charities. If you would like to find out more about how we can help please contact us on 01733 882800 or email [email protected].
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