Charity Fraud

I was thinking about the different types of fraud that I have investigated over the years and I realised that Charity Fraud was one of the main subjects cropping up again and again. It seems that charities are prone to the attack of the fraudster. This might be for two different reasons:

1. The fraudster exploits the good nature of the donor who finds it hard to say “no” when asked to provide funds.

2. Within an otherwise good intentioned charity there is a lot of money flowing in and the promoters get greedy and start taking more and more for themselves.

The first charity fraud method is a business or company that is set up with the sole intention  of making money for the benefit of the owners. This can be a charity publishing scam – support publishing companies they are often called. There are some of these that operate legitimately. A charity will approach them and commission a fund raising booklet or other publication. The support publishers will then attempt to raise advertising revenue for the charity usually using tele-sales methods. Out of all the money raised the support publisher will take its agreed fees. By law, the publication will state which charity it is supporting and how much of the money raised has gone to the charity.

This is an attempt to prevent those support publishers that use charities’ or other good causes’ names in vain, with no intention of passing any of the money raised over. In addition they will only produce enough of the publication to make the advertisers think the booklet is for real.

Charity frauds are big business. It may only be a small part of charitable activity, however this is a massive business in itself. Dealing with charities fraud must be by educating people to be more cautious. Warn them to say no if they are not sure and not to blindly give to every approach simply out of good heart. It is better to say “no…sorry” and give the money to a known and regularly supported cause than to waste money enriching the fraudster.

Another problem concerning charities is their alleged connections in some cases to terrorist activities. Terror networks are developing around the globe and often use charities as means for raising funds or for cover of their terrible business. Only relativelysmall amounts of money are involved compared to purely money making scams which makes it a lot harder for the authorities to police them.

About Mark Jenner

Mark Jenner is an experienced forensic accountant specialising in fraud and white collar criminal matters. He provides independent financial investigation and expert accounting witness services to police forces, fraud regulators and criminal defence lawyers, also providing assistance and solutions to organisations embroiled in financial disputes.

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