Credit crunch pushes fraud to record levels
Businesses need to step up their efforts to stamp out fraud as figures show a dramatic rise in fraud losses
Banks and corporates are seeking fraud investigation services
UK businesses are losing a huge amount of money by failing to detect
fraudulent activity within their ranks, according to a new report.
The latest FraudTrack report, compiled by accounting firm BDO Stoy Hayward,
shows there has been an alarming increase in fraud over the past six months.
Reported fraud cost UK businesses about £705m in the last six months, a 74 per
cent increase on the same period last year.
According to Simon Bevan, the head of BDO Stoy’s fraud services team, businesses
need to be more vigilant about detecting fraud from within, particularly as the
economic uncertainty deepens.
‘The combination of spiralling personal debt and desperate employees spells real
danger for business. Especially when, sadly, our figures provide clear evidence
that commercial organisations of all types and size throughout the UK are
currently failing, in some cases quite spectacularly, to get to grips with the
fraudulent activity of their staff,’ said Bevan.
According to the data, management fraud accounts for 46 per cent of fraud cases.
The finance and insurance sectors have been the worst hit by the fraud increase,
with reported fraud costing the industry about £636m, accounting for 90 per cent
of the total cost of UK fraud over the past six months. But the worst is yet to
come, according to Bevan.
“We are seeing a dramatic increase in banks, corporates and public sector
organisations contacting us directly about our fraud investigation and
prevention services and we expect this to rocket further still. Interest is
coming from Board level as senior executives at British businesses are becoming
increasingly concerned about fraud risk as the credit crunch bites.”