Like any other sector, charities are not immune to criminal abuse from fraudsters. Fraud poses a serious risk to valuable funds and sensitive data, and can damage the good reputation of charities, affecting public trust and confidence in the sector as a whole.
Fraud is dishonesty, involving either:
- false representation, for example identity fraud
- failing to disclose information
- abuse of position to make a gain or cause loss to another
Fraud is the most reported crime in the UK. According to the Office for National Statistics, an individual in the UK is 10 times more likely to be a victim of fraud than theft. The charity sector is no different.
Estimates of the scale of charity fraud in recent years have varied between nearly £150 million and almost £2 billion per year. It is clear that the loss to fraud has a significant impact on the good work that charities do.
Fraud can come from internal sources (insider fraud), for example by employees and volunteers, or from external sources such as fake emails set up by hoaxers.