By Zoe Unankah, Cancer Research UK
During my first week at Cancer Research UK the Counter Fraud Manager asked me to undertake some research into the risks around Legacy Fraud… Fortunately I knew from my pre-interview research that a third of CRUK’s fundraised money comes from legacies, so it was a high priority for me to understand fraud risk in this area. Unfortunately, there isn’t much research available meaning we don’t really know the scale of the problem, as they say, “You don’t know what you don’t know!”
It’s important to understand what behaviours constitute legacy fraud – well, if you think of fraud as “Theft with a Trick” legacy fraud is “Theft with a Trick and a Will”!
More seriously it’s dishonestly appropriating funds or property bequeathed in a will, and it’s important to note that most of the cases I have had sight of so far relate to transactions prior to death. This was a key discovery for me, prior to this I had only considered the posthumous fraud and irregularities as things like:
Funds being sent to recipients not intended on the Will.
Incorrect/ reduced amount of funds or assets sent to the intended recipients.
Concealing the existence of a Will.
Concealing estate assets.
Selling assets cheaply to a friend or associate.
Changing bank details so that the funds are redirected.
And of course, there is solicitor fraud too, an article from the ICEAW1 describes how Canon Collins Trust became a victim of legacy fraud when they were left £1.5m in a will which they were not expecting. More than two years had passed before the charity first heard about the bequest and by then the estate had already been stolen through the fraudulent activities of a local solicitor.
To prevent fraud, it is critical to map the process, with legacies this starts with a solicitor creating a Will. When Covid-19 struck, and we were instructed to stay indoors and face to face solicitor consultations had to be paused, so it became allowable to use video and telephone calls to witness the signing of Wills. Sounds great, but it became more difficult for solicitors to determine their client’s capacity, spot signs that raised suspicion and verify identity.
Although the relaxed Covid-19 controls have now ended and solicitors can return to face-to-face meetings, there is concern that where virtual meetings are considered the easier option and the issues mentioned might still pose a threat.
Communication between charities is another way to mitigate legacy fraud. This was demonstrated by an incident that occurred between Royal National Institute of Blind People (RNIB) and Blind Veterans UK.
Daniel Pepper, senior legacy income manager at RNIB speaking at the Institute for Legacy Management (ILM) Annual Conference explained that the RNIB and Blind Veterans UK were both owed money from a Will, when the RNIB contacted Blind Veterans UK, they were sent a differing set of accounts that showed that £250,000 was missing. It became apparent that a solicitor had stolen money from the woman’s Will.
Pepper said: “The only way this guy got found out is because my colleague spoke to another charity that got the information. You’re on the frontline against fraud in legacy work.”2(Emphasis added).
I could write lots more about this type of fraud – but to close off I just want to give you My three key learnings:
Make sure basic controls are in place to minimise fraud risk and include and escalation process for where to report concerns.
Know your testator, create and maintain a relationship with the person making the will and where possible the estate, if you know what to expect it’s much easier to identify irregularities before they turn into fraud.
Think about the warning signs, what sort of behaviours or comments might indicate that all is not well?
Good luck and I’m already thinking about which area of the business I need to look at next!