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Latest News & Upcoming Events

CIFAS 2011 - Insider fraud increases
Analysis of frauds recorded on the CIFAS Staff Fraud Database reveals an alarming increase in the level of fraud being committed by employees during 2011 (when compared with 2010).

Please click on the link below for further information.

Extraordinary Year for Fraudsters in the UK
The cost of fraud in Britain topped a record £3.5bn in 2011 in what has been described as an "extraordinary year" for conmen.

Accounting firm KPMG's annual Fraud Barometer recorded £2.5bn worth of fraudulent activity in the second half of the year, the most ever in a six-month period.

Please click on the link below to read the full story.

CIFAS 2011 fraud trends
The analysis of fraud trends during 2011 by CIFAS – the UK's Fraud Prevention Service reveals a disturbing 9% increase in the overall level of fraud, when compared with the previous year, with further key findings presenting a stark picture of the economic crime landscape in the UK.

Please click on the link below for further information.

Fraud levels increased in 2011, says BDO
Reported fraud in the UK broke the £2bn barrier in 2011 but this was dwarfed by the levels of fraud that go unreported, an accountancy group has said.

Fraud rose by 50% on the previous year to £2.09bn, with more than a third of this the result of tax fraud, BDO said.

However, its head of fraud - Simon Bevan - said at least 10 times more fraud went unreported.

He said firms should take a more proactive approach to tackling fraud, especially in tough economic times.

BDO has been tracking fraud levels since 2003.

"The fact that reported fraud is up is worrying, but not at all surprising. When the economic climate is difficult there is even more focus on the bottom line and driving out unnecessary costs, so fraud is more likely to be uncovered," Mr Bevan said.

"But organisations need to be much more proactive when it comes to preventing fraud. Too often risk teams are either too externally focused or fail to look at fraud from a financial point of view."

The retail sector saw a big jump in its share of all reported fraud. The sector's share of total reported fraud rose to 12% in 2011 from 2% the previous year, according to the BDO figures.

Tax fraud, notably VAT avoidance, accounted for 36% of all fraud.

The finance and insurance sector accounted for the lowest proportion of total fraud for five years.

However, Mr Bevan said that financial services were still too focused on cutting credit card fraud and phishing scams - when criminals try to gather personal information - rather than other areas of risk such as fraud surrounding mortgages or commercial lending.

(Source: bbc.co.uk/news)
Insurers pay £9m to fund fraud unit
The initial three-year project will see insurers pay around £9m to establish a 35-strong unit to investigate and bring insurance fraud to prosecution. The team will look into organised frauds involving teams of crooks that work with doctors and solicitors to fake claims.

City of London Police commissioner Adrian Leppard said: "We have to reduce our costs as part of the cuts all police forces are going through. This allows us to retain resources that might otherwise have been lost."

The work of the new unit will be directed by a panel made up of the City of London Police, the Association of British Insurers and the National Fraud Authority and Insurance Fraud Bureau. While the panel will set strategic aims the police will remain in control of all operations.

The partnership is not the first and may not be the last between the City of London Police and the private sector. The police already run a unit funded by the banking industry designed to tackle credit card fraud, the Dedicated Cheque and Plastic Card Unit. The unit is estimated to have saved banks and their customers around £370m in its eight-year life.

The next area could be mortgage fraud where talks are understood to be underway about establishing a similar unit.

Mr Leppard said: "We are keen to expand this idea to take in other areas and other partners. This could include industries such as telecoms as well as financial services."

The insurance unit is expected to focus on bringing some high-profile cases to trial to act as a deterrent to other potential fraudsters. However it will also look at how it can help introduce preventative measures to stop insurance fraud taking place. The main focus of the unit it likely to be "cash for crash" scams where accidents are set up or fabricated in order to generate claims.

According to the ABI insurance fraud adds £44 per year to every insurance premium. David Neave, chairman of the Insurance Fraud Bureau, said: "This strategic step is further evidence of the investment and commitment by the insurance industry in combating fraud."

The three-year scheme could be extended however a spokesman for the ABI said it would not be used a template for other areas of police work such as funding the investigations of burglaries. All the parties registered that there are concerns that flow from the private sector funding police work. However they stressed operational matters will be left entirely with the police rather than being directed by insurers.

All police forces are facing 20pc cuts in funding over the next four years. While the City of London Police, the lead force on economic crime, has undertaken to maintain its presence on the streets of the City and its terrorism work it has said it will have to cut some of its economic crime policing.

As well as undertaking its own investigations the new insurance fraud unit will assist regional police forces with their own investigations.

The unit is due to go live at the start of 2012.

(Source: http://www.telegraph.co.uk/)
2011 Counter Fraud and Forensic Accounting Conference

Date and Venue:

Monday June 13th, Portland Building, University of Portsmouth, Portsmouth.

Key speakers include:

Progress in Countering Fraud: Stephen Harrison, Director of Enforcement, National Fraud Authority

Measuring and Reducing the Real Cost of Fraud - the 2011 Update: Jim Gee, Director of Counter Fraud Services, PKF and Chair of the CCFS.

Perspectives on Forensic Accounting: Kay Linnell, Partner,  Kay Linnell and Co and Master of the Worshipful Company of Arbitrators

Using Intelligence Processes in Fraud Risk Management.  Alan Day, Senior Audit & Investigations Manager - Fraud & Security for Transport for London

The First Portsmouth Public Attitudes to Fraud Survey: Dr Andrea Shawyer, University of Portsmouth.

There will also be themed sessions with multiple speakers on: Technology and Fraud, Types of Fraud, Public Sector Fraud and investigating fraud. Additionally there will be a meet the author session with recent authors of fraud related books.

Click here for the agenda and to register...
ACPO Economic Crime Portfolio Fraud Forum
The ACPO Economic Crime Portfolio will be hosting their next fraud forum on the 26th and 27th May 2011 at De Vere Conference Centre, Wokefield Park, Near Reading. This two day event will debate the key challenges facing the counter fraud community at a time of great uncertainty politically and economically.

For further details and to book your place please visit www.tcp-events.co.uk/fraudforum or call 01323 637713

Click here to view the forum flyer...
Fraud costs the UK over £38 billion, says the National Fraud Authority
On the 27 January, 2011] the National Fraud Authority (NFA) published its second Annual Fraud Indicator (AFI), which estimates fraud is costing the UK over £38 billion a year.

Loss estimates to fraud by sector:

· Public - £21 billion

· Private - £12 billion

· Individuals - £4 billion

· Charity - £1.3 billion

Full information is published in the Annual Fraud Indicator 2011

Click here to download
How bank staff and customers can protect themselves against fraud
The British Bankers Association (BBA) have produced some new fact sheets on how bank staff and customers can protect themselves against fraud.

Please click on the link below for further information.

Click here for further info
Fourth Annual Conference of the London Fraud Forum

The fourth annual conference of the LONDON FRAUD FORUM, entitled: "TOWARDS LONDON 2012", will take place on Thursday 7th October 2010 at One Great George Street, London SW1.

For further details and to book your place please contact Judith Halliwell, on 020 8847 4074 or judith@conference-network.co.uk;  website:  www.londonfraudforum.co.uk or click on the link below to view the flyer for the event.

click here to view the conference flyer...
New CIFAS Report
Please click on the link below to read a new report from CIFAS, the UK's Fraud Prevention Service, entitled: "Best Practice Guide: Protecting the vulnerable".

click here to open the report...
Identity theft rises by a third

12 February 2010

Last year saw a huge surge in financial fraud, partly due to the recession. Here's how to keep your hard-earned money away from crooks.

During recessions, businesses fail, people lose their jobs and others lose their homes. However, one group lives well during downturns: fraudsters.

This recession has proved no exception. Indeed, financial fraud is soaring, according the latest figures from CIFAS, the UK's fraud prevention service. In particular, the number of victims of identity fraud has risen steeply...

25,000 more victims in 2009

Identity fraud involves the use of a stolen or false identity to obtain goods or services by deception. This can be by impersonation (pretending to be someone else in order to obtain goods or credit in that person's name), or by takeover (when fraudsters use personal data to seize control of someone's bank or credit accounts).

The number of cases of successful identity fraud rose by nearly seven-tenths (69%) during 2009, reaching almost 57,400 incidents (or more than 1,000 cases a week). Unsuccessful identity fraud -- where credit was not granted -- rose by a mere 3% to nearly 45,000 cases last year.

In total, over 102,000 people were victims of identity fraud in 2009, a rise of almost 25,000 on 2008. This means that the number of cases rose by nearly a third (32%) in one year, despite lending levels crashing thanks to the credit crunch. Hence, we all need to be on our guard against financial felons!

How to keep your finances safe

How can you stop criminals -- including cyber-crooks who lurk online -- from stealing your hard-earned cash? The simple answer is to play it safe by following these ten tips:

1.    Protect your paperwork

In the wrong hands, your identity and personal information can be very valuable. So, keep yours secure by guarding your paperwork. Don't just throw out old documents, as these could be salvaged from your bin. Instead, shred statements, receipts, and anything showing your name, address or any financial details.

This includes any paperwork for savings and insurance policies, as crooks will not hesitate to cash these in if they can. Also, every six to 12 months, carry out a quick check of your personal credit file kept by the three credit-reference agencies. You can get a free credit report from Experian.

2.    Protect your passwords and PINs

Your password and Personal Identification Numbers (PINs) are the gatekeepers to your money. So, don't write them down, record or store them -- and don't reveal them to anyone, no matter how legitimate they appear to be.

Try not to use the same password for all your accounts or websites, as this means that one key will fit all of your locks. Likewise, random PINs are best, as dates of birth (and years of birth) are the easiest numbers for crooks to guess.

3.    Check your statements

To be properly in control of your household finances, you should keep a close eye on your income and outgoings. By checking your bank and card statements every month, you can see where your money's going and, at the same time, keep an eye out for suspicious transactions.

4.    Block foreign transfers

I've instructed my bank not to send any sum of money -- no matter how small -- to an overseas account without first seeking my approval. This simple step means that I don't have to fret about foreign fraudsters hacking into and cleaning out my current account. If your bank will allow you to do this, then it puts up another barrier to financial fraud.

5.    Use mobile-phone alerts

I must be one of the last remaining adults in the UK without a mobile phone. However, I know that the rest of you take your phones everywhere and rely on them completely to manage your day-to-day lives.

Therefore, if you always have your mobile with you, then it makes perfect sense to keep a close eye on your account by monitoring your balance with mobile-phone alerts. What could be easier and simpler in the fight against fraud?

6.    Watch out for 'change of address' notices

One of the first things that fraudsters will do is attempt to change the address to which your statements are sent. Once your statements have been diverted, they are free to spend madly, knowing that the only thing in their way is your credit limit.

If you suspect that your mail is being redirected, then first contact the firm concerned. To find out if a mail-redirection order has been made in your name without your knowledge, contact the Royal Mail on 08457 740 740.

7.    Don't give out information over the phone

Never, ever divulge personal or account information to anyone who calls you out of the blue -- even if they claim to be from your bank, the police or another official body. Either hang up and call the correct number, or take down their number and verify it before calling back. Your bank's employees will never ask for your entire PIN, password or security number.

8.    Watch out for phishing emails

'Phishing' emails are sent by fraudsters to seem as though they come from a bank or credit card company. If you respond to one of these bogus emails, then your security details could be used to plunder your account.

Alternatively, a virus may be introduced into your computer which records your keystrokes and passwords, enabling cyber-crooks remote access to your accounts. Therefore, don't open fishy emails and avoid clicking on the links therein. Instead, dodge dummy websites by always keying in recognised website addresses.

9.    Keep your computer clean and safe

In order to make vastly greater profits, organised criminals have moved online. After all, why mug one victim when you can steal hundreds of account details in one fell swoop? There are hundreds, if not thousands, of ways of corrupting PCs in order to steal online data.

To keep your PC healthy, read Twelve tips to keep you safe online and Spam, scams and cyber-crooks.

10. Try Protective Registration

If all else fails and you do become the victim of identity fraud, then you can reduce your risk in future by signing up to the Protective Registration Service from CIFAS. For a yearly fee of £14.10, this places a 'warning flag' in your credit files, making it much more difficult to obtain credit and services in your name.

You are the weakest link!

In summary, always remember that cunning criminals constantly change their methods in order to find a weakness in order to defraud you. Therefore, it's vital that you stay on your guard, because you are always the weakest link. In the fight against financial crime, well-informed is well-armed. Thus, for more advice, visit the government-approved and business-sponsored Identity Theft website.

(Source: lovemoney.com)

New report exposes academic credential abuse

A new Report published by Verifile Limited exposes a multi-billion dollar international fake diploma fraud. Alarmingly, the US was found to be the world’s fake college capital. The Report indicates that 810 diploma mills have already been identified in the US and many more still are under investigation. With more than 45 percent of the diploma mills operating on the west coast including California, Hawaii, Washington, Nevada and Arizona the western states have the dubious distinction of leading the country in offering up these fraudulent entities that give students a short-circuited college degree and the capability to misrepresent themselves to employers.

The groundbreaking report is the result of an 18-month international research project into diploma and accreditation mills – fake Universities and Colleges. The research was carried out by Verifile’s research team with the support of Cambridge University and the East of England Development Agency.

To access the report please click on the link below.

Click here for the report
International Anti Corruption Day
The 9th of December 2009 marks International Anti Corruption Day.

Attached is a poster from the United Nations office that is leading on this. We hope the information may be of interest to you.

Licensing of private sector investigators postponed

For those members for whom this is of interest; at the SIA conference held in Manchester on 20th May 2009, the Acting CEO of the Security Industry Authority (SIA), Andy Drane stated that licensing of investigators in the private sector had been postponed by the Home Office until "at least" 2012. He went on to say that according to the Home Office "Private Investigators were not perceived as a threat to the public".

When one considers that "threat to the public" was the reason why the licensing of investigators was included (at the 11th hour) into the Private Security Industry Act, 2001 in the first place, then contrast that against the current slippage in licensing - 8 years and then the recent statement, one could be forgiven for suspecting that the licensing of investigators in the private sector is moribund and will not now take place.

Bond Solon's Investigators Conference - 19th June 2009
The Bond Solon Annual Investigators' Conference is being held in London on the 19th June 2009. Bond Solon have offered a 10% discount off the price of conference places booked by EFF members. Any EFF members booking a place on the conference will need to quote 'EFF' either over the phone or on the booking form to qualify for the discount.

Click here for details...
Opportunism, resentment and lax controls present greatest staff fraud risks

Poor controls and staff resentment, combined with pure opportunism, are some of the most common themes behind internal financial frauds, compliance officers and risk officers have heard.

Martin Gill, a professor of criminology, told the Financial Services Authority's financial crime conference that a different approach was needed to tackle internal financial fraud. Gill, who has been working with the regulator and visiting convicted fraudsters to gain an insight into the criminal psyche, said that most attempts to stop financial crime had failed to take account of offender perspectives.

"What we have done is come up with lots of solutions without realising what the problems are. We must listen to what the offenders say. As much as we don't like it they are very, very good at what they do," he said.

Gill embarked on a series of visits to fraud offenders in prison and found that unlike most other categories of prisoners fraudsters were not generally "career criminals". He spoke to a variety of prisoners who were serving sentences of between one and seven years. He pointed to the example of "Greg" as someone who displayed the classic characteristics of a fraudster.

Gill explained that "Greg" felt a deep resentment about the way that his company treated him, and worked in an industry which he believed was less than honest. He also had ready access to company cash. While employed, "Greg" was threatened with redundancy, which caused him further resentment and anxiety. Gill explained that this was often a trigger for fraud.

"Greg" started taking various amounts of money from the company and managed to cover his tracks each time. Over the 13 years he was stealing he was not audited once, Gill explained. He was also very careful and was only caught because he got greedy, delegates heard. "There are reasons that make people angry and annoyed. Most fraudsters say it was easy and a surprising amount say others might have known what was going on had they paid attention," he said.

Gill explained that fraudsters tended to adapt to situations very easily. They are often characterised by boredom in their jobs/personal life, by a need for status, by a temporary
unbalance they are suffering, the opportunity presented by weak controls, or the fact that they have been targeted by blackmailers. The professor said that opportunity was a big, big deal for fraudsters, as well as grievances that they might have against an employer. "Reduce opportunity and you reduce the amount of crime," he said.

Gill warned that firms needed to properly implement any controls that they had as many fraudsters he spoke to said that the controls which companies put in place were simply not good enough to stop determined criminals. The conference also heard from David Hicks, head of forensic insurance at KPMG, who warned that firms needed to assess their staff vetting procedures to root out potential fraudsters. Many suspects would have been spotted by good vetting procedures, he said.

Source – complinet 11 May 2009

FSO to request new powers

The UK’s Serious Fraud Office (SFO) is to ask the Parliament for greater powers in the fight against corporate fraud, claims the Law Society Gazette. The trade magazine’s report claims that the SFO is currently consulting a legal team before it presents its case to Parliament later this year.

The Gazette reports that high on the list of the SFO’s priorities will be new powers to fine companies and also impose deferred prosecutions. The SFO will also request new legislation to mandate companies to report fraud as soon as it is discovered and it is also said to be interested in new powers to subpoena company directors. The SFO declined to comment on the report.

At a recent fraud conference, SFO director Richard Alderman highlighted the difference between the US and UK fraud prosecution systems and added: “It is for parliament to consider whether the powers of the SFO are sufficient here or whether more is needed.”

Source – complaineonline 08 May 2009

British MEP is charged with fraud

A British member of the European Parliament has been charged with false accounting and money laundering.

Tom Wise, 60, from Leighton Buzzard in Bedfordshire, was elected for UKIP in 2004 but is now sitting as an Independent MEP for East Anglia.

The Crown Prosecution Service (CPS) said the UK police inquiry followed a news report in 2005 concerning Mr Wise's use of allowances.

The MEP has been charged along with his then researcher Lindsay Jenkins.

Both are accused of one count of false accounting and one count of money laundering.

The offences are alleged to have taken place between October 2004 and September 2005.

Derek Frame, from the CPS, said: "Following the publication of a news article in October 2005 relating to Mr Wise and Ms Jenkins, the European Anti-Fraud Office (OLAF) began an investigation into Mr Wise's use of allowances.

"OLAF subsequently passed the investigation to Bedfordshire Police Economic Crime Unit for investigation."

Mr Wise, who represents Suffolk, Essex, Norfolk, Cambridgeshire, Bedfordshire and Hertfordshire, is one of seven MEPs who cover the eastern region.

He was unavailable to comment on the matter.

Mr Wise and Ms Jenkins are due to appear at Westminster Magistrates' Court on 27 April.

Source: news.bbc.co.uk, 20th April 2009

Britain moves to tighten anti-bribery laws

The British government has proposed new legislation to crack down on UK-based individuals or companies that engage in bribery overseas. Under the draft bribery bill, it would become a criminal offence to offer or accept a bribe anywhere in the world.

The move is designed to bring the UK's anti-corruption laws into line with international practice, the news agency noted. The Organisation for Economic Cooperation and Development recently criticised British anti-bribery laws for being inconsistent and too narrow in their scope, Reuters noted.

Introducing the new bill, justice minister Jack Straw acknowledged that existing legislation is incomplete and out of date, the news agency added. "This bill will better help the police, prosecutors and courts to tackle bribery wherever it occurs," he commented.

Measures included in the bill include increasing the maximum sentence for bribery from seven to ten years in prison with an unlimited fine. It would also allow companies to be prosecuted for negligence if they fail to prevent a bribe.
Source - complinet 26 March 2009

Major UK conference on combating terrorist financing, money laundering & bribery

As the UK government announces its latest measures to fight terrorist financing, and also bribery and corruption, the Institute of Money Laundering Prevention Officers is holding its sixth annual conference to discuss these and other key concerns facing all those working in the front line of financial crime prevention.

The Draft Bribery Bill was published on March 25. The government, which was strongly criticised in 2008 by the Organisation for Economic Cooperation and Development for "continued failure" to meet its international obligations in tackling bribery, aims to simplify the legislation to allow prosecutors and courts to deal with bribery more effectively. It will become illegal to offer or accept a bribe, either at home or abroad, and the bill will introduce a corporate offence of negligent failure by commercial organisations to prevent bribery.

The day before, on March 24, the government announced its updated counter-terrorism strategy, which identifies specific subjects of interest, including terrorist finance. The government drew up its original anti-terror strategy in 2003, but has been forced to redraft the document as the nature of the terrorist threat has changed.

One of the speakers at the IMLPO conference, taking place on May 11/12, 2009 in Blackpool, is John Drysdale, chairman of Transparency International, the UK Chapter of the world's leading non-governmental anti-corruption organisation, Transparency International.

Transparency International aims to fight corruption by promoting change in values and attitudes at home and abroad, through programmes that draw on the UK’s unique position as a world political and business centre with close links to developing countries.

Also speaking at the conference, on the subject of the latest global developments in counter-terrorist financing, is Richard Barrett, coordinator of the Al Qaeda/Taliban monitoring team of the United Nations, New York. Barrett wrote in a recent paper: "The private sector plays a pivotal, frontline role in countering terrorism financing, as well as in post-incident investigations. Banks know more about their clients than any other professional body: they know how, where, and when their clients get their money, as well as how, where, and when they spend it. Without bank cooperation, counter-terrorism work would be far more difficult and less successful."

Other key issues that will be covered at the conference include the difficult question of balancing anti-money laundering obligations, client confidentiality and data protection requirements. The problems of whether to do business with politically exposed persons will also be discussed.

Delegates will also hear updates on the future plans of HM Treasury, and the Financial Services Authority.

Source - complinet 26 March 2009

Fraud figures reveal some interesting gender patterns

If men truly are from Mars and women from Venus, then figures from CIFAS - The UK's Fraud Prevention Service - confirm this by showing some remarkable differences between the sexes when it comes to fraud.

Most fraudsters, across the spectrum of cases filed by CIFAS Members, are men. In addition, some noticeable patterns emerge. Female fraudsters are most commonly seen in frauds involving mail order accounts, whereas the male fraudster is most prevalent in frauds involving asset finance or insurance.

Sandra Peaston, CIFAS Research Manager, comments: "This demonstrates some peculiar over-arching trends, with the proportion of female fraudsters being most often noted in mail order, communications and loan frauds. Similarly, the vast majority of male fraudsters in the areas of asset finance and insurance may go some way to demonstrate that it really is a case of 'boys and their toys'!"

An examination of the CIFAS Staff Fraud Database, however, shows a different balance, with over 40% of staff fraudsters being women. Furthermore, these figures reveal that male fraudsters are typically employed for a shorter period of time than their female equivalents.

CIFAS Staff Fraud Adviser, Arjun Medhi, notes that "the threat of staff fraud is much less gender specific than financial fraud. The longer period of employment for female fraudsters, interestingly, highlights an apparent different modus operandi between the sexes. Women seem either to wait longer before attempting to defraud their employers, or are able to disguise their activities better."

Richard Hurley, CIFAS Communications Manager, concludes: "These figures might go some way to show how the 'difference between the sexes' is manifested in unexpected ways. What should never be forgotten, however, is the damage that any of these actions will cause - irrespective of gender - in terms of financial loss and professional reputation."

Source - http://www.cifas.org.uk/default.asp?edit_id=898-57 25 March 2009

Slack Audits Facilitate Corporate Fraud

Up to 70 percent of corporate fraud is committed by employees and occurs because of broken processes, according to consulting firm Deloitte.

Deloitte forensic specialist Kelvin Kennedy, who was in charge of fraud reduction at SunCorp for three years, said fraud is inevitable for business because anti-fraud structures such as payroll master reports and whistle blower facilities are under-resourced.

"If you haven't had fraud against you in the last two years, you missed it," Kennedy told a Sydney conference.

Kennedy, also a former federal police officer, refuted claims by other analysts that it is possible to map a typical fraudster, or act of fraud.

Industry concensus paints a typical fraudster as white, bald and 30 years old.

"Red flags are always different between organisations," Kennedy said. "It can be done by new customers, staff or triggered by a change in behaviour in existing trusted staff."

However, he said most fraud is unoriginal, poorly planned and only successful because of "broken controls".

"So you've got your payroll master report that logs every change to standard payments. They are printed and filed... but who actually looks through them," Kennedy said, adding much of the fraud he sees can be detected early if basic audit trails are reviewed.

Like many analysts, he suggests the Australian recession will push redundant and financially strung staff to commit fraud. About 80 percent of the average company's workforce would not normally commit fraud, Kennedy said, while the bottom and top 10 percent are respectively "career criminals" and "saints".

While staff screening and background checks keep most career criminals out of organisations, Kennedy said a personal crisis can turn long term staff who have intimate knowledge of business processes into very successful fraudsters.

He said business should consider ongoing background checks to detect emerging propensities for fraud in trusted staff, regularly check audit trails and ensure investigations into suspected fraudulent employees are admissible in court.

Kennedy said businesses must consider looming quasi-US data breach laws when deciding whether to report incidents of fraud to the police or Australian Securities Exchange.


24 March 2009

Regulator wins first insider dealing case

The financial regulator secured its first criminal conviction against insider dealing on Friday, after years of criticism that it had failed to tackle market abuse.

The Financial Services Authority said in a statement that a solicitor and his father-in-law had been found guilty of insider dealing and sharing the proceeds in the lead-up to an acquisition.

"By pursuing a criminal prosecution in this case, the FSA has shown that we will take tough action to achieve our aim of credible deterrence in the financial markets," said Margaret Cole, the director of enforcement at the FSA.

"Anyone engaging in similar acts should see this as a clear warning that the FSA intends to bring all its powers to bear to protect the integrity of our markets."

In the case, solicitor Christopher McQuoid learnt that his employer TTP Communications was about to be taken over by Motorola (MOT.N). Two days before the takeover was announced, McQuoid's father-in-law James William Melbourne bought almost 154,000 shares in the company.

He sold at a later date and made a profit of almost 50,000 pounds, which he later shared with his son-in-law, the FSA said.

Insider dealing cases, which are notoriously hard to prove, usually involve the buying or selling of stock based on information not in the public domain about upcoming mergers, acquisitions or other news that could affect the share price.

The regulator had previously defined such cases as civil offences, which resulted in fines, but Friday's ruling was its first successful criminal prosecution. It is also prosecuting three other cases and said it was determined to toughen up its approach.

McQuoid and Melbourne will be sentenced Monday. Market abuse can be punished by up to seven years in jail.



27 March 2009

Investors in Irish hedge fund sue over fraud by Madoff

Investors In Thema International, an offshore hedge fund based in Ireland, have filed a lawsuit in New York in an effort to claw back $3 billion (2.3 billion euros) they lost in the Bernard Madoff Ponzi scheme.

Fabian Perrone, an Argentine hedge fund investor, and Chia Hung Kao, who is from Taiwan, filed the complaint in New York last week.

The pair are likely to become the lead plaintiffs in the class action, which is filed on behalf of all investors in hedge funds controlled by Thema International Fund of Ireland; the Primeo Fund and the Medici funds between March 1st, 2001 and December 10th, 2008.

British banking giant HSBC along with accountancy firms Ernst Young and PriceWaterhouse Coopers have been named as defendants in the $3 billion class action lawsuit filed on March 19th in New York District Court.

The lawsuit is just the latest in a long line of legal actions filed by angry Madoff victims desperate to recoup billions of dollars of lost funds.

HSBC is named in the suit as it acted as administrator and custodian for two of the funds. Brian Murray, a lawyer with Murray Frank and Sailer LLC in New York, explained that HSBC was included in the suit as it was responsible for determining the net asset value of the funds.

"The contention is they should have done better due diligence," Mr Murray said.

If HSBC and other advisers had been more thorough in performing due diligence, it is alleged, they would have realised Madoff had never traded a share and was not in fact making any legitimate profits for decades.

Ernst and Young and PWC, meanwhile, are included in the suit for their alleged role in auditing some of the funds and for giving expert opinion on them in investment prospectuses. None of the defendants would comment about the class action lawsuit.

Madoff, meanwhile, is still in jail in New York where he awaits sentencing after pleading guilty to 11 counts of fraud.

His wife Ruth remains free but is under investigation by US authorities. A New York judge last week signed an order to freeze the assets of Madoffs brother Peter, who is also under scrutiny in the $65 billion fraud case.



Downturn creates fraud temptation

The value of procurement fraud in the UK increased 347 per cent during 2008, according to a report by BDO Stoy Hayward.

The accountancy firm found total purchasing fraud reached £273 million last year, compared with £78.7 million in 2007. It said the economic downturn has played a major role in encouraging both buyers and suppliers to try and secure money illegally.

Simon Bevan, national head of the Fraud Services Team at BDO, said the financial crisis has put added pressure on margins and more people are willing to "try it on". He explained fraud is now at similar levels to those of seen during the last downturn in the early 1990s, and the problem will continue to get worse until the economy recovers.

The study found popular tactics used by buyers to defraud vendors include falsely claiming stock has been under-delivered, temporarily withholding payment and not settling invoices at all.

It also revealed a rise in more traditional forms of corruption, such as bribery and collusion among suppliers. The industries where most fraud was reported were retail, financial services and the public sector.

Bevan predicts that as corruption increases, whistle blowing is likely to fall as employees will want to safeguard their jobs. "Why would they cause trouble? More likely, they will put their heads down, work hard and be thankful they can still pay their mortgage."

To combat fraud, he recommended buyers assess relationships with their 10 biggest suppliers as higher value contracts are more likely to attract corrupt activity.

Source - http://www.supplymanagement.com/EDIT/CURRENT_ISSUE_pages/CI_news_item.asp?id=19240 05 February 2009

40% of executives avoid disclosing corruption

Four out of out of ten global executives are reluctant to disclose significant corruption incidents to authorities, according to a survey by Deloitte.

The survey of 329 executives from around the world - almost a fifth of which were from the financial service industry - found that 41 per cent of respondents indicated that senior management should investigate and deal with matters internally or wait to see if there are consequences rather than make a voluntary disclosure to authorities if a significant incident of corruption was uncovered at their organisations.

The study, titled 'Fortifying Anti-Corruption in Today’s Corporation', also revealed that despite differing views about regulatory disclosure, 93 per cent of those surveyed believe that an internal investigation should be conducted if a significant incident of corruption were uncovered and 75 per cent support zero tolerance anti-corruption policies with strong disciplinary measures, including firing those responsible for corrupt acts.

Nic Carrington, forensic and dispute services partner at Deloitte, said: "Certainly as it relates to voluntary disclosure to the UK authorities, we are possibly not yet at a point where companies would readily see that such action would be in their best interest, given the historic attention, or rather lack of it, on corruption issues. However, the new SFO leadership in very recent months has been vociferous in underlining its new commitment to combating overseas corruption and indeed encouraging companies to self-report to them rather than the other way round.

"It certainly seems that the UK may find itself moving inexorably to a more American style of regulation and prosecution of corruption, where the merits of voluntary disclosure have been well publicised. Keeping the lid on such matters in the future may well prove to not be in a company’s best interests."

The study also revealed the increasing role of internal audit in anti-corruption compliance. When asked to select up to three sources that would likely lead to changes in the respondents’ organisations, advice from internal auditors was identified by 57 per cent of respondents as most likely to lead to changes in an anti-corruption programme, while compliance and internal audits were selected by 80 per cent of respondents as one of the best ways to measure a programme’s effectiveness.

In addition, 47 per cent of those surveyed said that integrating an anti-corruption programme into their internal audit system would make detection and prevention of corruption easier, with an additional 33 per cent indicating that it is already integrated.

"Straightforward lapses and overrides of internal controls are frequently at the heart of corruption cases. Companies need to ensure that their anti-corruption compliance programmes are not just sitting on the office bookshelves of executive management, but that rather line staff are putting them into practice on a daily basis. Focused testing of these programmes by experienced staff, including at a transactional level, is a must," said Carrington.

Source - complianceonline 4th February 2009

Fraud in Britain at near record levels - KPMG

Fraud in the UK hit near-record levels last year, accounting firm KPMG [KPMG.UL] said on Monday, and with the bulk of offences committed since the credit crunch began in August 2007 not yet heard in court, the worst is yet to come.

More than 1.1 billion pounds ($1.6 billion) of fraud came to British courts last year, the highest amount recorded since 1995 and the second highest in the 21-year history of KPMG Forensic's Fraud Barometer, the firm said in a statement.
"These figures are bad enough in themselves, but I fear the trend for the next couple of years will be even worse," said Hitesh Patel, fraud investigation partner at KPMG Forensic.
"As the global economic downturn takes hold and organisations look ever more closely at their operations it is very likely that more fraud will come to light so that the real impact of the credit crunch on fraud is yet to be fully felt."

See http://www.kpmg.co.uk/news/detail.cfm?pr=3334
Source –
 02 February 2009

National Fraud Strategic Authority Announces Chief Executive
The NFSA has today announced that Dr. Bernard Herdan CB will take over the role of Chief Executive from 1 April 2009 succeeding the Interim Chief Executive Sandra Quinn.

Please click on the link below for a full copy of the press release.

click here for press release
Financial companies urged to be careful with personal data

The Serious Organised Crime Agency is telling businesses to take extra care with personal data, warning of the vulnerability of small firms such as IFAs to threats of organised crime in light of the credit crunch.

SOCA executive director and chairman Paul Evans said IFAs were ‘vulnerable’ to threats of organised crime and said the agency was working with the regulator to look at ways of supporting them.

‘They are small businesses and may not have the wherewithal, the information and the resources to protect themselves from threats. We are working very closely with the FSA on looking at that market and doing what we can to help them’ he said.

Evans said the suspicious activity reports (SARs) regime - which was set up to help combat money laundering and terrorist financing - had made steady progress in the last year and SARs had successfully been used to initiate investigations leading to arrests, charges and convictions.

Over the past year, SOCA, which has been dubbed Britain's FBI, had restrained criminal assets in cash to the value of £1.2 million and passed through the court process to forfeit cash to the tune of £10.6 million.

But he said the credit crunch would have an impact on serious organised crime and SOCA was working with a number of bodies, including the financial action taskforce on a ‘global threat assessment’.

Reports of suspicious activities were highest in the banking sector between 2007 and 2008, with 145,905 cases reported out of 210,520 total cases.

Building societies and bookmakers were the sectors with the second and third highest number of reported cases, with 11,372 and 9,546 cases respectively.

Going forward Evans identified that the illegal market for personal data was growing and urged companies to be extra vigilant when handling personal information belonging to themselves and to others.

‘If I was running a business what I would be looking at most is personal data. The government record is not brilliant, but I can tell you the criminal appetite to obtain personal data has not diminished and is probably growing.’

(Source - http://www.citywire.co.uk/personal/-/news/markets-companies-and-funds/content.aspx?ID=321800&Page=2 )
24 November 2008

Fraud group plans anti fraud institute

The North East Fraud Forum (NEFF) has discussed new plans to expand its anti-fraud work and build a fraud-busting institute. The forum, whose members include regional police forces, businesses and academics, is currently a not-for-profit organisation set up five years ago to raise awareness of new scams and frauds for local businesses. It also hosts fraud awareness seminars on counterfeiting and money laundering.

Speaking to The Journal, the NEFF said it has applied for European funding to build an anti-fraud institute in the region. Chairman Alan Brown said: "We've identified the problem, we want to do something about it and if we can get the funding to support the notion of eliminating fraud using technology developing more awareness then we'd like to be able to do it because there are scientific solutions to some of these problems."

The NEFF, which was the first such regional forum whose model has since been replicated in nine other regions in the UK, is also considering a request for funding of £600,000 to take its fraud awareness seminars to Europe.

(Source - complianceonline.co.uk 10 September 2008)

Fraud is "low police priority"

The director of the Fraud Prosecution Service for England & Wales has said that victims of fraud are "lucky" if the incident is investigated and more specialist police officers are needed to boost prosecutions, according to a BBC report.

David Kirk told the BBC that the number of fraud squad officers has fallen from 600 to 400 over the past 10 years and although improvements are in the pipeline - including the launch of the National Fraud Strategic Authority next month and the addition of 40 specialist officers at the City of London Police - he said that fraud investigation is a low priority for police in the UK and that fraud should not be considered a "victimless" crime.

"If you were an ordinary member of public taking your complaint about a fraud along to your local police station, you would probably find that you would not get much response - you would have to be quite lucky to get it investigated", he told the BBC, blaming budget cuts for the low priority.

Mr Kirk said fraud crime is on the increase, not least due to the current economic climate which has been blamed for the increase in mortgage fraud and boiler room scams.

(Source - complainceonline.co.uk 12 September 2008)

HMRC publishes revised Money Laundering Regulations guide

On 12 September 2008, HM Revenue & Customs (HMRC) published (http://www.hmrc.gov.uk/mlr/mlr8.pdf) a revised MLR8 guide to the prevention of money laundering and terrorist financing (revised Guide).

The revised Guide is dated August 2008 and it updates the previous MLR8 guide which was published by HMRC in December 2007. It has been approved by Kitty Ussher, Economic Secretary to HM Treasury, as "relevant guidance" for the purposes of the following:

The Proceeds of Crime Act 2002 (POCA).

The Terrorism Act 2000.

The Money Laundering Regulations 2007.

The Transfer of Funds (Information on the Payer) Regulations 2007 (SI 2007/3298).

The revised Guide is intended to provide relevant businesses which are supervised by HMRC with comprehensive guidance on implementing the legal requirements for measures designed to deter, detect and disrupt money laundering and terrorist financing. It includes industry sector specific guidance, including for high value dealers, bureaux de change and money transmission businesses. It is based on and, where appropriate, replicates the Joint Money Laundering Steering Group (JMLSG) guidance for businesses regulated by FSA.

The revised Guide incorporates amendments including in relation to the following:

Senior management responsibilities (section 4).

Identifying companies and their beneficial owners (sections 7.8.1, 8.2.2 and 17.2).

Financial restrictions (sections 2.2.5, 7.14, 15.6, 19.6 and 20.13).

The addition of guidance for trust or company service providers (appendix 10).

These (and the other) amendments are briefly outlined in a note (http://www.hmrc.gov.uk/mlr/mlrguide.htm) published by HMRC to accompany the revised Guide.

(Source - HMRC 12 September 2008)

Serious Organised Crime Agency 'raids' on money service businesses in Bradford raises some questions

Money Transfer businesses in Bradford are getting their businesses moving again following a co-ordinated operation last week led by the Serious Organised Crime Agency (SOCA) which saw visits to more than 40 money transfer businesses in the city.

Over a three day period, SOCA made visits to pre-identified MSB's without giving any prior warning to the business owners. Officers from HM Revenue and Customs and the local police were also in attendance during each visit. Working on the basis of warrants issued by Doncaster magistrates. SOCA were able to enter premises unhindered and were able to seize and copy all material found for subsequent examination off site which were returned to all relevant business owners within 24hours.

100,000 in cash was seized during the raids, most of this money was returned to the business owners without further action.

Sources within SOCA have indicated that they have informed and initial picture of what the operation has revealed. They have noted that:

1. A number of the MSB's visited were not registered with HMRC (in direct contravention of the 2007 Money Laundering Regulations).

2. Many businesses were failing to comply fully with obligations imposed under the 2007 MLR's (in particular, businesses could not demonstrate that they had trained their staff adequately).

3. There were concerns about the extent and quality o f record keeping.

4. There was evidence that businesses did not have procedures in place which allowed them to identify suspicious customer behaviour - nor did they know how to report the suspicious behaviour to the authorities.

SOCA will now review all the information they have gathered to see what action should be taken against individual businesses, it looks likely that criminal charges will follow.

MEP arrested on fraud allegation
A member of the European Parliament for the East has been arrested on suspicion of obtaining money by deception.

Tom Wise, 60, from Leighton Buzzard in Bedfordshire was questioned by police on Friday about an alleged fraud. He was later given bail. The former policeman who was elected for UKIP had the party whip withdrawn in 2007 and now sits as an independent.

Mr Wise, who represents Suffolk, Essex, Norfolk, Cambridgeshire, Bedfordshire and Hertfordshire, was elected in 2004. He is one of seven MEPs covering the east of England. A spokesperson from Bedfordshire Police told the BBC a man was arrested for obtaining money by deception and has been released on bail pending further inquiries.

(Source: http://news.bbc.co.uk/1/hi/england/7467318.stm)
Panel predicts fraud boom
The Fraud Advisory Panel has warned that the current economic downturn may prompt an increased risk of corporate financial crime.

Publishing its annual review, the independent watchdog listed high interest rates, more restrictive covenants and forced asset sales as a condition of raising finance as key drivers of fraud in a downturn. It added that linking high-level remuneration to financial targets can also incentivise
business fraud.

Ros Wright, chairman of the Panel and a former director of the Serious Fraud Office, said that worsening economic conditions can often lead to an increase in financial crime.

"The pressures caused by tighter access to funds can lead some senior executives to forge their way to capital gains. Over-valuing assets is a common scam," she said.

The Panel’s annual review also highlights a new risk of deliberate misreporting in areas such as the environment and ethical sourcing. With organisations increasingly expected to display greater social responsibility, there is potential scope for dishonest business executives to gain financially by manipulating these indicators.

Wright said that it is vital for firms to create an anti-fraud culture where each employee has a responsibility for fraud prevention and detection and all boards of directors supply clear standards and strong leadership.

“Effective prevention strategies have never been more important and will save many companies from ruin if fully implemented. It will also help avoid a re-run of what happened during the last downturn in the early 1990s, which saw major fraud cases such as Polly Peck, Maxwell and BCCI,” she said.

(Source – complianceonline.co.uk 18/06/2008)
Fraudster ordered to repay £750,000
A man from Blackburn who used more than 100 fake identities to commit fraud and launder money has been ordered to pay back over £750,000.

According to the Blackburn Citizen, Daniel Lawrence, 28, used the fake identities to steal almost £1 million before he was arrested last January when police raided his print business, Print Inspiration in Blackburn.

Lawrence was earlier this year sentenced to six years in prison after pleading guilty to 33 offences of fraud and money laundering.

Following the sentencing, Lancashire Constabulary's Proceeds of Crime Unit put forward an application to confiscate the proceeds from his crimes. And a judge at a hearing at Manchester Crown Court this week accepted Lawrence had benefited from his criminal conduct to the value of £1,276,481.21 and was ordered to pay £776,481.21 within six months or face a further four and a half years
prison sentence.

Last year police searched properties in Blackburn, Colne, Preston and Manchester as well as Print Inspiration where they discovered scores of false cheque books and credit cards, which he had used to carry out his frauds.

He lived both as Robert Ikunnah, a Nigerian immigrant living on benefits and as Daniel Lawrence, a successful businessman driving a BMW M5 tourer with a private registration. He even took driving tests under his aliases to give them more credibility.

Police were alerted when Lawrence set up unit trust funds using his own bank accounts before changing the direct debit details to those of major companies, believing they would not notice small amounts leaving their accounts.

At his peak Lawrence claimed £716,000 in fictitious VAT receipts from HM Revenue and Customs. He also set up 208 separate bank and credit card accounts through which he was able to gain £200,000 in loans from banks and more than £40,000 from other outlets such as loan companies.

After leaving court, financial investigator DC Stuart Haigh said: "Lawrence is a very intelligent and ingenious criminal who targeted banks, the Government and public companies. As this case shows, people will not profit from crime in Lancashire."

He added: "The Proceeds of Crime Act is one of many tools we are using to come down hard on offenders, it has given police powers to strip criminals of assets acquired through crime. In most cases the main motivation of organised criminals is financial gain and therefore this is an area in which we can hit the criminal hardest."

(Source – complianceonline.co.uk 20/06/2008)
Hertfordshire rogue trader and launderer jailed
A Hertfordshire man who made £200,000 from trading illegally and laundering the proceeds has received a 15-month prison sentence. Johnny Connors, of Watford Road in Chiswell Green, pleaded guilty to laundering criminal property derived from rogue trading and tax evasion. He tried to deposit more than £20,000 of stolen money into a bank account.

His crimes were of a tawdry sort. He pressurised consumers into hiring him to lay down garden paving before charging them exorbitant fees for substandard work.

Police arrested him at Heathrow Airport on his return from a stay in Dubai. As well as his jail term, he has to satisfy a confiscation order awarded against him for £200,000. If he fails to come up with the loot, he will have to serve a further
default sentence of two years and six months. Under the UK's draconian legal system, a judge set his target without recourse to a jury. If he appeals against the target, he will still find himself deprived of such access.

(Source – Complinet 19/06/2008)
US-style reform planned for fraud probes

Companies and executives suspected of fraud would face shorter investigations and a better chance of cutting deals under US-style proposed reforms due to be unveiled in a report this week.

The plans - drawn up by Jessica de Grazia, a former US prosecutor - have already triggered reforms at the Serious Fraud Office that could turn into the biggest in the organisation’s 20-year history, say investigators and lawyers.

The long-awaited report is a key test of the credibility of the SFO’s flagship role in tackling fraud, amid criticism over sprawling cases, failed high-profile prosecutions and political
pressure on it.

One SFO insider said the report’s recommendations drew extensively on the experience of the US, where cases are generally resolved more quickly and many suspects plead guilty to win jail sentence reductions.

The insider said: "I don’t think it pulls any punches. But I think what she’s saying is something that everyone who’s involved in prosecuting these kind of cases must take seriously."

The report, commissioned more than a year ago as part of an ongoing government review of how fraud is tackled, will call on the SFO to cut investigation times that can run into many years, people familiar with it say.

It will recommend building on modest moves towards doing deals on sentencing in exchange for early guilty pleas. It will also push for a paring down of the epic document disclosure processes that another SFO insider said plagued complex financial cases.

Source - Financial Times, 08/06/2008

UK firms lack fraud staff

UK companies are falling behind the international trend for specialist fraud personnel, according to the results of Grant Thornton’s annual International Business Report. Some 37% of private UK companies employ specialists to detect fraud, compared with a global average of 45% and as high as 59% in the US, the survey found.

Grant Thornton said 7% of UK businesses had increased staff involvement in fraud prevention in the past 12 months, which it said was "one of the lowest rates in the world"
compared with the global average of 12%.

The survey, which covered 7,400 owners and senior managers across 33 countries, identified the Philippines as the most fraud conscious, with audit specialists in place at 72% of private firms. However, the UK was not at the bottom of the league table with Japan and Denmark recording 17% of businesses with staff resources dedicated to preventing fraud.

Phil Crooks, Head of Assurance Services at Grant Thornton, said it was a well documented fact that in times of economic downturn fraud tended to increase and the figures should be "a wake-up call" for both the accounting industry and business owners.

"History shows that fraud is more prevalent when times are hard. Prevention is better than detection...The coming 12 months will be a good indication of whether the UK has been
complacent, or has matched the threat with the appropriate level of resource."

Grant Thornton said internal controls are the most common fraud detection measure but UK companies are still ignoring the importance of internal audit. "People often associate fraud with the theft of cash or assets, but it is far more common to see accounting fraud caused by managers under pressure to deliver a certain result".

"Unfortunately many UK firms are unsure of the appropriate prevention and detection methods to handle common business fraud, particularly misappropriation of company assets and resources as a result of inadequate separation of duties, and misplaced trust on key personnel," Mr Crooks said.

(Source - complianceonline.co.uk, 02/06/2008)


According to the Office of Fair Trading (IFT) some 3.2m people in the UK are affected by scams each year. The total cost to these victims is estimated to be £3.5bn. The table below shows the most common scams and how much they cost in total as well as the average cost per victim.

[1] Victims are persuaded to give their bank details in order to receive large amounts of money from Africa. Their accounts are then cleared.
[2] Having won a ‘free holiday’, victims then have to pay for flights and extras – and do not get to go where they want, when they want.
[3]Recipients received a letter promising predictions that will ‘change their lives forever’, provided they pay a fee.
[4] Consumers accidentally use software that connects them to the internet using an expensive telephone line.
[5] Victims are placed on a waiting list for a ‘valuable free gift’ if they spend >£20 on the scammer’s website. Those at the top of the list only receive their ‘gift’ when further 100 people have spent enough to be signed up.

[Source: Office of Fair Trading]

Trust me, I’m an Airline Pilot

Consumer confidence in professions in the UK shows that he most trusted professionals are airline pilots. Research carried out in 2007 by Reader’s Digest show that 95% of those questioned have trust in the people who fy them to their business and holiday destinations. By contrast the least trusted people in the UK (with only 7% questioned indicating that they trust them) were politicians - one percent below Car Salesmen. Interestingly, Cabbies and lawyers are on equal footing at 48%.  However, the same survey showed the UK’s most trusted brand as British Airways. It remains to be seen what effect the new Heathrow Terminal Five will have on this in 2008!

The league table of professionals is a follows:

Middle-class Crime

If one believes the various Daily Mail articles throughout the year the traditional middle class folk demons would appear to be are either hooded youths or gun-toting drugs dealers. However, the readers of that publication could do well to look to their own.

According to research by Keele University, petty crime amongst the middle classes is rife. A study carried out in June 2007 by Professor Susanne Karstedt and Dr Stephen Farrall, indicated that some 61% had committed a crime against their employer, the government, or a business. Those questioned admitted to the following misdemeanours:

Paid cash-in-hand to avoid tax 34% 
Kept cash when ‘over-changed’ 32% 
Purloined something from work 18%  
Avoided paying TV icence 11% 
Padded out an insurance claim 7%
Asked a bureaucrat friend to ‘bend the rules’ 6%
Misclaimed benefits 3%

[Source: Keele University]

Identity Fraud
From the website of the Council for British Archaeology (CBA):

"The CBA has been alerted to a system whereby financial fraud is conducted through the use of charity bank accounts. Apparently an organised gang in southern England is working its way through the Charity Commission website of charities, identifying charities that have websites. It then accesses those websites to identify charities that encourage people to apply to become members on-line or make donations by direct debit. These charities give their bank account numbers and sort codes on their website in order to facilitate direct debits. The fraudsters then use these details to set up direct debit payments from the charity bank account in order to to buy insurances online - for which they automatically receive a valid certificate of cover online. These can then be used for purposes of identity theft. Organisations should therefore be aware of the potential danger of disclosing bank details online and of the possibility of fraudulent direct debits arrangements being established on their accounts. Some small charities may feel that direct debits are not appropriate for them, in which case it would be useful to instruct their bank that none are to be established. Regular checking of bank statements for unusual items is, of course, good practice."

Council for British Archaeology
St Mary's House, 66 Bootham, York YO30 7BZ,
United Kingdom.
Company Limited by Guarantee, registered in England 1760254. Registered Charity 287815.

ACPO fraud report now available
Click Here To Zoom In On This Image Click on the link below to view the latest ACPO report entitled: "The Nature, Extent and Economic Impact on Fraud in the UK".

The report was produced in February 2007 for the Association of Chief Police Officers' Economic Crime Portfolio by Michael Levi, John Burrows, Matthew H. Fleming, and Matthew Hopkins with the assistance of Kent Matthews.
Combat Fraud with the NEFF 10 Point Plan

Follow the 10 Point Plan to Combat Economic Crime:

1. Have in place an anti-fraud policy which is easy to understand and circulated throughout all employees of your organisation. Maintain a momentum.

2. Have a nominated team within your organisation which is responsible for all fraud issues, risk management and investigations.

3. Promote systems within your organisation to detect fraud.

4. Adopt appropriate controls and have in place a fraud response plan.

5. Consider fraud as a business risk, take it seriously. Focus on prevention.

6. Provide fraud awareness training for all ensuring an alertness to the indicators of fraud.

7. Install an effective 'whistleblowing' policy. Reward efficiency and reduction in losses.

8. Don't recruit fraudsters in the first place; know your customer/client/employee.

9. Involve and seek advice from your Economic Crime Unit right from the outset or detection of a fraud.

10. Be tough, punish offenders.



Eastern Fraud Forum