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Charities lack sufficient fraud protection

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The report entitled ‘Breach of Trust’, based on a survey sent to charities selected at random from the UK’s Charity Commission register, said that half of respondents believed fraud to be a significant financial risk. Only 11 per cent of the 1,123 charities that responded, however, currently employ a detailed anti-fraud policy.

The report also found that even though most charities believed the not-for-profit field to be more vulnerable to fraud than other sectors, only 7 per cent had been victims of fraud within the last two years, as compared with approximately half of commercial businesses.

Despite the small number of charities affected by fraud, those that were victims endured serious consequences including cancelled projects, damaged reputations and staff redundancies.

A director of the Fraud Advisory Stephen Hill said that even though the Charity Commission provides a lot of information about fraud, it was surprising how many charities were unaware of what to do when victimised, or of their responsibility to report the fraud to the commission.

“This will give the commission something to think about in terms of how they can communicate with charities.”

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