Friday, 30 November 2018

Charities warned against selling kiloware; may be aiding postal fraud

The United Kingdon's Charity Commission has warned charities of the dangers of selling kiloware in this stark warning on it's media website.
News story - 30 November 2018
Alert for charities - fundraising and postal stamp fraud

This alert provides information and advice to charity trustees, employees and volunteers about stamp fraud and the risks associated with it.

Stamp fraud involves the preparation, distribution and sale of previously used stamps for reuse. Usually these stamps are sold online, at a lower price than the standard postal service rate.

Anyone knowingly collecting, preparing, distributing, reusing or selling used stamps to avoid paying full postal fees may be committing a form of fraud.

How it can impact charities

A number of charities collect used stamps as a means of fundraising.

Although we do not believe that charities are knowingly profiting from the collection and sale of used stamps, some are inadvertently enabling this form of fraud by selling packages of used stamps, commonly referred to as ‘kiloware’.

The majority of these stamps are then prepared and fraudulently re-sold as if they were valid postage. The money being made by criminal gangs from this type of fraud is significant, and can be used to fund further and wider scale criminal activity.

Fundraisers may believe they are selling stamps to collectors but this is rarely the case as these stamps have little collectable value.

Charities should avoid engaging in this activity unless they are certain that the stamps collected and sold are genuinely being bought by collectors, and are not being used for fraudulent purposes.

Warning signs to look out for

Signs that a potential buyer of used stamps may not be a genuine collector include:

Requests to bulk buy
Be wary of requests from individuals to purchase UK or GB ‘kiloware’ from you in bulk. Genuine collectors tend to have their own sources of used stamps and often trade with each other – it is unlikely that they would specifically call on charities to provide loose stamps.

Requests for certain types of stamps

There is no reason for any genuine dealer to request previously used, uncancelled stamps, ‘Non Value Indicator’ stamps (do not display a price), or Christmas stamps in bulk. An uncancelled stamp is one which has been through the postal system, but hasn’t been marked as used. It is often incorrectly referred to as unfranked.

Offering to deal stamps on your behalf
Some stamp collectors may genuinely request foreign or specialist stamps but charities should consider a company or person offering to deal stamps on their behalf as a potential red flag.

All of the above examples put your organisation at risk of being unwittingly involved in a form of fraud that is potentially funding wider scale criminal activity.

How to protect your charity from stamp fraud
Decline requests from individuals or groups who wish to purchase used GB stamps from you directly - either through direct contact or via your online marketplace. Additionally, let Royal Mail know if you suspect that a request may not be from a genuine dealer.

If you are satisfied that your stamps are destined for collectors, check the type of stamps you are collecting. Foreign stamps are less likely to be fraudulently sold in the UK.

Consider checking that your charity name is not being used in ‘kiloware’ advertising without your permission.

If you buy stamps for your charity’s own use then buy them from the Post Office or any other reputable seller. Stamps are typically not sold at a discounted price.

How to report fraud

To report suspected stamp fraud, and for more information on the subject, please visit the Royal Mail website.

If your charity becomes a victim of insider fraud, or any other type of fraud, report it to Action Fraud by calling 0300 123 2040, or by visiting the Action Fraud website.

Charities affected by fraud should also report it to the Charity Commission as a serious incident, using the dedicated email address rsi@charitycommission.gsi.gov.uk

Serious incident reporting helps us to assess the volume and impact of incidents within charities, and to understand the risks facing the sector as a whole. Where appropriate, we can also provide timely advice and guidance.
How many misleading or downright false statements can you see there?   I count 7 or 8.

Whilst it is true that a great many people have benefitted from buying kiloware and removing the uncancelled stamps for reuse this was never the original intention and it would not happen at all if postal authorities cancelled the stamps as they were used!

3 comments:

  1. Utterly outrageous! In all my 55+ years of collecting, never have I seen an advert for kiloware or similar with even a hint of offering the stamps for re-use. If it does happen, and it probably does in a small number of cases, then RM should go for the ones that re-use them, not the genuine charity sellers etc. As you say, if RM followed their own cancellation procedures properly, then the problem wouldn't arise. Suggested opening line for a letter that RM may like to use: 'Dear Charity Fundraiser. In order to save time and money we often don't cancel stamps used through the post for the first time. If they then get sold and re-used then it's clearly your fault and not ours or the fraudulent user. Also, it's easier for us to prosecute you rather than your buyers. Best wishes from Royal Mail and we hope you have a good time collecting and selling all those used Christmas Stamps. We will be back to you in the New Year with our summons. Happy 2019.'

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  2. Just had a quick look at ebay... One seller of unmarked stamps says, "If mint stamps in pristine condition are required it is politely suggested that they are purchased from a Post Office.

    Another seller says, "For collectors purposes only"

    However, not all unmarked stamp sellers say this or words to that effect. There's one raising money for a theatre, and there's no mention of the stamps being for collectors (or even art) and cannot be used for postage.


    "

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  3. You only have to look across eBay to spot a number that don't warn the buyer about fraudulent misuse etc.



    Also - how many sellers actually care about who buys them and just put a caveat in to cover their own backs?



    The published statement is clearly warning charities to ensure they are selling to genuine collectors; that should in theory mean more available for us that haven't been snapped up by criminal gangs, washed and put back through the system. Win/Win!

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