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ACNC: Charities must protect themselves against fraud

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The Australian Charities and Not-for-profits Commission (ACNC) urged charities to take measures to protect themselves against fraud.

ACNC Commissioner, the Hon Dr Gary Johns says all organisations are at risk of fraud and that charities are just as likely to be targeted by fraudsters as private corporations.

“Charities are not immune to fraud. Just because a charity’s purpose is to do good, does not mean everyone who interacts with that charity has the same noble aim,” he said. “The trust and goodwill that charities rely on makes them vulnerable to exploitation, especially if they fail to put preventative measures in place.”

Dr Johns says it is more effective to prevent fraud from occurring than to investigate and take remedial action afterwards.

“Not all charities will be able to withstand the financial loss and reputational damage caused to them if they fall victim to fraudsters. However, all charities can assess their risk of being targeted by fraudsters and take measures to reduce that risk,” Dr Johns said.

Assistant Minister for Charities, Zed Seselja, said it is important for the vibrancy of the charities sector that we all talk openly about fraud.

“It’s up to everyone involved in charities to talk openly about fraud – the only people benefiting from silence on fraud are the perpetrators,” he said. “If you think something is not right, report a concern to the ACNC.”

Implementing a fraud prevention strategy, and applying data security mechanisms and strong financial controls, are measures charities can take to help prevent fraud.

The ACNC has a wealth of resources to support charities to protect themselves from fraud. The recently released Governance Toolkit includes modules to help charities manage risks including financial abuse, cybersecurity and working with partners.

October 21-26 is Charity Fraud Awareness Week, an international initiative designed to raise awareness and help prevent fraud in the charity sector. The ACNC is proud to be supporting and promoting Charity Fraud Awareness Week 2019.

On average, the ACNC receives 160 concerns about charities each month. The most common areas of charity non-compliance are private benefit for charity’s responsible persons, duties of responsible persons, particularly poor financial management, and fraudulent or criminal activity.

Fraud concerns raised include Matthew Hanks arrested in Wollongong with more than 50 fraud offences, Michael Scott Lawson Clark whole stole $350,000 from youth and homeless charity SYC, and Cancer con artist Belle Gibson for failure to pay a $410,000 penalty for duping Australians.

In 2018-19, the ACCC’s Scamwatch received 996 reports of fake charity scams, with reported losses of $300,395 across the financial year.

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