Regulator updates advice on ‘increasing problem’ of fraud against RSLs
The advice note, which revises the previous notice from September 2012, alerts RSLs to recent fraudulent activity and highlights the importance of effective procedures to guard against risk.
Describing fraud as “an increasing problem”, the regulator urges RSLs to ensure they have effective procedures in place to mitigate the risk of the following types of fraud occurring.
Examples of some of the different types of fraud that have been notified to the regulator include:
In this type of fraud, the fraudster will impersonate a member of staff from within the organisation, generally the senior officer. The fraudster will send an email requesting a payment be made that will appear to be a genuine request from that member of staff. The email or a subsequent email will provide the bank details that would see a transfer of funds being made to the fraudster’s account.
For this type of fraud, the fraudster will make contact and request that payment details for one of your supplier or contractor organisations be updated. A failure to have sufficient checks in place to ensure that the request is genuine will see the payment being forwarded to the fraudster’s bank account. Recovery of money in these circumstances can be difficult.
This will see a false cheque drawn on the RSL’s bank account being presented at a high street clearing bank. The false cheque could either have been created by the fraudster, be as a result of a cheque book that was issued by the bank to the RSL being intercepted, or it could be a genuine cheque but with a signatory who lacks the authority to sign cheques.
Overcharging by a Contractor
This fraud occurs when a contractor issues an invoice for work that has not yet been completed. There is a greater risk of this occurring where milestone agreements are in place that determine when payments should be made.
Fraudulent Claiming of Expenses
This is a fraud perpetuated by a member of staff, which will see the fraudulent claiming of expenses not permitted by the organisation’s policy. The risk of this is increased where there is insufficient segregation of duties.
The regulator said: “We would expect RSLs to have robust procedures in place to minimise the risks of any attempts at fraud from being successful. If you uncover any activities that you believe to be fraudulent, you should continue to advise us through our notifiable events process.”