Charities and legacy fraud

Charity Fraud Awareness Week gave us all a lot to think about. One area that charities should not overlook is legacy fraud. We all know that legacies are a vital source of income for charities, and last year saw legacy income at a record high. However, charities are believed to lose more than £40m of that precious income to legacy fraud each year.

The Fraud Advisory Panel has published a new help sheet for charities, “Introduction to Legacy Fraud”. The help sheet offers examples, warning signs and practical tips. It recommends that charities should ask themselves a number of questions in order to build their defences against legacy fraud. These include:

  • Do we have sufficient in-house knowledge of legacy law and fraud risk?
  • Are we using a legacy notification service to ensure we are informed of our legacies and can keep track of them?
  • Do we liaise with other beneficiaries to make sure we are all receiving the same information?
  • Do we use external sources to validate entries in the estate accounts?
  • Are regular process reviews carried out on outstanding legacies?

Leticia Jennings, a partner in Bates Wells’ Legacies team, commented “whilst it is great news for charities that legacy income is at a record high, there are many ways in which fraudsters can exploit charities and legacies left to them. The Fraud Advisory Panel’s help sheet sets out some key issues and risk areas for charities to consider, so that preventative steps can be taken.”

If you have any concerns relating to issues of this nature, it is imperative that your charity takes prompt legal advice. If you would like more information about how to protect your charity from legacy fraud, or to discuss a specific matter, please contact Leticia Jennings or Mindy Jhittay.

Further information and resources relating to Charity Fraud Awareness Week are available via Twitter using #CharityFraudOut.

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of October 31, 2018.