Chapter Fraud Prevention

In a world where identity theft and credit card fraud have become daily topics of conversation at work, IPMA-HR chapters must have a viable strategy to protect their financial resources.

During the last year, some IPMA-HR chapters have received fraudulent email messages created by scam artists impersonating other board members. Individuals such as board Presidents, Secretaries and Treasurers are prime targets because their information can easily identified through a simple web search.  Messaging can take various forms, but often officers are impersonated through a fictitious email account or through text messaging.  Fraudulent requests are often related to typical chapter event planning activities so the urgent request seems viable.  Reportedly requests have been made demanding Treasurers to disburse chapter funds to make a deposit for future speaker or meeting venue.

Rather than falling victim to a fraudulent email scam, there are several actions you can take to pro-actively establish better controls related to your chapter finances:

  • No Payment Requests via Email or Text: Don't allow any chapter officer to make a financial related request via email or text message. There must be a high level of transparency around any request involving the use of chapter funds and all officers must complete or obtain required approvals. Having forms to substantiate funding requests is also a best practice and reinforces dual controls.
  • Question All Unusual Requests (No Substitute for Personal Contact): No matter how rushed or busy you may become; it is important to make personal contact by phone for any request involving the use of chapter funds.Remember to question unusual requests being made by board members that appear suspicious or out of character for the individual initiating the request.
  • Require A Two Person Rule: Establish two-signatures for withdrawals on all accounts with your financial institution.You can also require additional authorizations for withdrawals over a set limit, this will necessitate a higher level of transparency around any large financial transaction.
  • Know Your Limits: Inquire with your financial institution to establish daily transaction and withdrawal limits for ATM/Debit and Point of Sale purchases.As a best practice you may want to consider disabling wire transfer options for online banking access.
  • Take Advantage of Banking Alert Messages: Seek assistance from your financial institution to create low-balance or daily withdrawal account alerts for all individuals who have signing authority on your chapter accounts. Alert messages are typically delivered by email or text message.
  • Establish Separate Online Banking Access: Require all officers with access to chapter funds to have individual (unique) login-password setup for online banking.Never share chapter ATM/Debit cards, require authorized users to use their own card for authorized transactions. Individual online banking access supports greater visibility among board members so no one is solely managing the chapter finances.
  • Take Appropriate Action to Report Suspicious Activity: If your chapter receives a fraudulent email request or is the victim of a banking scam, contact your financial institution immediately.Your financial institution will be able to help place a hold on your account to protect your funds if notified immediately. Also seek assistance from your local law enforcement agency (economic crimes unit) to file a police report.

If you receive a fraudulent email request, it is important to respond to the individual to make them aware you have determined their request is fake and put them on notice you won't continue the correspondence.  Additionally, you should take action to notify your Information Technology Department who can help block future messages.

Establishing dual controls for chapter financial matters will help safeguard your resources and protect you against fraudulent attacks.  Do not assume someone else is taking care of it for you.  I encourage you to make inquiries with your board members immediately to establish your own strategy and raise the level of awareness on this important topic.

 

 

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