Chasing the money

What do you do when someone who is raising cash for you does not hand it over? Rebecca Cooney reports

One of the more tricky frauds facing charities is the kind of theft in which someone takes part in a challenge or other fundraising event but never actually donates the money to the cause they say they are supporting - a form of what is known as diversion theft.

Charities are unlikely to pursue people through the criminal courts because the costs of proceedings often outweigh the amount they are seeking to reclaim.

But there is another, cheaper alternative: they can use the civil route and seek a County Court Judgment. If the individual fails to pay up, the CCJ will show up on a credit check for the next six years, limiting their ability to borrow money or rent a property.

At a conference on charity fraud held last October, Robert Browell, a fraud adviser at Macmillan Cancer Support, discussed how it had made use of the CCJ. "If you believe someone is a serial offender, it's likely that taking civil action won't get a response," he said. "But if it's a one-off, the effect can be far greater than going to the police because the offender doesn't want to damage their credit rating."

Macmillan handles about 150 fraud and theft cases a year, and estimates that about 70 per cent are these kind of fake fundraiser frauds. About 10 per cent of all the fraud cases have resulted in Macmillan asking a court for a CCJ.

Browell said the first step was to establish that a fraud had taken place. He told the conference that suspicious donors would tip the charity off, and social media pages and photographs could be used as evidence to show the money was raised. It is important to talk to your trustees and the chief executive, Browell said, to establish your policy for seeking to recoup the money.

"We decided our policy would be to send two letters, both asking where the money is and explaining what action we'll take if they don't pay," he said. "If you send the letters by recorded delivery, you also know you've got the right address."

The first letter was often enough to make many people hand over the money straight away, Browell said.

If that failed, he said, the next step was to file a claim using a simple form on the government's Money Claim Online site. He said the fees for this operated on a sliding scale, from £25 for a claim of up to £300 to £410 for a claim of up to £10,000.

Once the claim was filed and served, the person being pursued had 14 days to respond, said Browell. They either had to tell the court they did not believe they owed the money and bring the case to a hearing or contact the charity to arrange payment.

None of the debtors Macmillan had pursued had chosen to argue the case at a hearing, Browell said. "Once the claim is issued, the onus is on the defendant to contact you and on you to self-manage the claim through the home page," he said. "You have to tell the court whether they have paid or not."

If they don't, Browell added, the CCJ is issued and the defendant has 30 days to pay before the CCJ goes on their credit record. If they pay after that, the CCJ remains on their record but is amended to show the debt has been paid. If they still don't pay, the charity can send bailiffs to ask for the money without entering the property. They can then ask for bailiffs to go in and take possessions to pay off the debt. Browell warned that each charity needed to decide in advance how far it was willing to go.

"We decided we would stop after sending bailiffs round," he said. "The idea of having bailiffs going into people's homes and taking things was not something we were comfortable with."

But even that might not be the end of the matter, said Browell. Months later, when the debtors have been refused a flat or a loan, they might well get in touch and be very keen to repay the money.

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