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Mandate Fraud – A Warning

Author: Henry Ejdelbaum

Tags: advice, charity, fraud, small business

No, this isn’t a tax saving tip – it is a warning for the unwary.
Awareness is being raised of a new scam, “mandate fraud” which is becoming increasingly common. The fraudster contacts an organisation (business, club, charity etc) masquerading as a supplier. They often have very convincing stationery, logos, web address and therefore look to be legitimate. They advise the unwary organisation that the supplier’s bank account has changed. Of course, the new account details are for an account controlled by the fraudster. Even “organisations” which are no more than one person have been caught out.

The Charity Commission has issued the following advice which applies as much to a business as a charity:
Remain vigilant to the continuing risk of mandate fraud and raise awareness amongst staff;
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 already held;
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.

Our advice: Changing bank accounts is unusual so treat any request to update records with suspicion. Do not rely solely on the supplier to inform you that legitimate payments have not been received – by then it may be too late to recover the money!