Voluntary sector organisations should take care to monitor their financial transactions after a string of direct debit frauds, the Charity Commission has warned.
The regulator has recommended that every charity should write to its bank to tell it that only named personnel can set up direct debits. Charities should also check their bank statements and reconcile them against their own payment records, it says.
Any charity that finds it has been the victim of fraud should be able to reclaim the money from its bank, the commission said in recent guidance.
John O'Brien, chief executive of CA Plus, a charity that provides financial services to other small third sector organisations, said he had seen several examples of charities being defrauded by fake standing orders made from their accounts.
He said he feared many charities were losing money because they failed to reconcile their books regularly, which would pick up such activity.
"With more online banking and direct payments, a group's bank details are easy to get hold of," he said.
A spokesman for electronic payment service Bacs, which processes direct debits, said: "Instances of direct debit fraud are very low when compared with alternative payment methods such as cheques or cards. We treat any instances of direct debit fraud extremely seriously, even though they rarely take place."