Fraud on the increase, BDO survey reveals

Publicly reported fraud cost UK companies £1.19bn last year, a 14% increase year-on-year, according to analysis by BDO Stoy Hayward.

Nearly two-thirds of affected companies were in the banking and insurance sectors, the annual FraudTrack survey found.

Experts believe that corporate fraud will rise in coming months as the economy worsens, following a pattern seen in previous slumps.

‘Our own experience is that FraudTrack only shows the tip of the fraud iceberg. This is just the beginning,’ said Simon Bevan, author of the report and national head of BDO Stoy Hayward’s Fraud Services team.

‘We will see more and more fraud being uncovered in the next two years and some of these will be stunning in their size, such as the recent Satyam case in India.’

Retailers have also been hit hard, with reported fraud rising 62% over the past two years. Companies have also reported a surge in fraud committed by suppliers and customers. This cost companies £273m during 2008 ­ an increase on the 2007 figure of 347%.

Examples include suppliers under delivering goods and over charging delivery.