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The Charity Commission, the independent regulator of charities in England and Wales, is urging charities to remain vigilant to the continuing threat of mandate fraud and the changing tactics that fraudsters are using to target charities.

Mandate fraud occurs when the fraudster tricks a victim into changing bank account details, in order to divert legitimate payments intended for a genuine organisation (eg a charity supplier) to bank accounts instead controlled by fraudsters. This often involves the fraudster impersonating an organisation representative, either by email, direct mail or telephone communication. The fraudster may also use headed paper and/or the company logo to lend credibility and to gain the charity鈥檚 trust.

The threat of mandate fraud is an on-going issue for charities, with cases continuing to be reported to Action Fraud from across the sector. We first brought this issue to the attention of charities in 2010.

In recent months, the commission has become aware of mandate fraud attempts where the fraudster has been able to use the email address of a regular contact at the legitimate organisation to deceive charities into changing change bank details.

The commission recommends that trustees and charity professionals spend a few moments familiarising themselves with and ensure that their charity has robust authorisation and monitoring procedures in place for changing bank details and managing payments. The advice is clear - any request to change bank account details is an unusual occurrence and should be treated with suspicion.

As a minimum, charities should:

• remain vigilant to the continuing risk of mandate fraud and raise awareness amongst those staff and volunteers with responsibility for charity finances -
• be suspicious of any change of bank detail requests until independently verified
• check and verify all requests for change of bank details using contact information held separately by the charity
• never rely solely on contact information provided in any form of external communication that requests a change of bank details
• check that a sample of payments has been received by the legitimate organisation after the change of bank details has been actioned
• do not rely solely on the organisation to inform your charity that legitimate payments have not been received - by then it may be too late to recover the money.

Michelle Russell, Director of Investigations, Monitoring and Enforcement, said:

The mandate fraud cases we hear about increasingly involve cunning tactics by fraudsters to gain the trust and confidence of their victims. There鈥檚 no doubt that fraud and deception tactics will keep on evolving. Awareness of fraud risk and the tactics used by fraudsters is the most effective way of preventing charities from becoming victims.

At the heart of charity is trust, but when it comes to control of charity finances, it鈥檚 crucial that vigilance and caution are the key watchwords.

It is also a timely reminder for trustees and senior charity staff to reflect on how fraud-aware their employees and volunteers are, and to review their charity鈥檚 financial controls.

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If you suspect you or your charity may have fallen victim to mandate fraud, you should .

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PR 02/16

Notes to editors

1. is the independent registrar and regulator of charities in England and Wales. We act in the public鈥檚 interest, to ensure that: * charities know what they have to do * the public know what charities do * charities are held to account
2. The commission鈥檚 previous fraud alerts were in and .