Apr 01, 2021 | International Payments
NGOs are ill-prepared to tackle fraud
Build your fraud framework in 4 key steps by including prevention, detection, remediation and mitigation.
We face fraudsters who, as we know, are more and more creative when it comes to scamming, and who have no qualms about defrauding victims even during a pandemic especially when there is money involved, and unless we work together, there will be no way to stop them.
As reported recently in the media, UK Police and Action Fraud have registered scams totalling GBP 1.6 million last year, more than 500 cases related to COVID alone, and more than 2000 phishing attempts. People in the UK received over 20% of global malicious spam emails with 'coronavirus' in the subject field.
In addition to economic damage, which is difficult to measure, there could be a negative impact on an organization's reputation in the long-term. Your primary goal should be to always guarantee donor confidence.
How to identify fraudulent activities?
Ignoring fraud won’t make it go away. Positive impact only results by strengthening your reputation and legitimacy by building trust in your organization. Fraud must be a priority - it only takes a single case of fraud to cause serious and maybe irreparable damage to your organisation.
Fraud can appear in these ways:
- Invoice diversion
- Money laundering
- Unauthorised fundraising
- Cyber attacks
Build your fraud framework in 4 key steps
“Prevention” focuses on the understanding the different types of fraud an NGO can face, who controls it, and how to fight proactively against it. Therefore, your prevention plan should include: data analysis, rule management, control management, business requirements, and training. “Detection” means accepting that you’re vulnerable despite your positive mission and acknowledging that training and outreach are vital and effective. “Mitigation” means placing the right people in the right jobs and ensuring effective communication throughout your organization. Finally, “remediation” means that NGOs must adapt and evolve, especially as online fraud activities increase.
Build your fraud strategy
Fraud mitigation doesn’t require expensive technology. It is about understanding the risk of each type of fraud, your organisation’s current limitations, and crafting an appropriate response. The human element of fraud control is key (policy, communication, procedure, knowledge). NGOs must accept that problems exist and be proactive instead of waiting until it is too late.
“Mitigating fraud helps you to achieve your mission.” Alex Beavan, Head of Fraud Investigation London, UK
For further information you can watch our trainings on demand:
Module 1: Watch here
Supporting Slides Module1: View or download here
Module 2: Watch here
Supporting Slides Module 2: View or download here
If you have questions please reach out to firstname.lastname@example.org
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*This blog article is provided for informational purposes only and does not provide any financial, legal, accounting or tax advice.