Corporate fraud falls in 2010

THE VALUE of reported fraud in the UK fell by 30% last year, according to a survey by BDO, although experts warn that corporate fraud is likely to rise again.

Reported fraud in the private and public sector fell to £1.4bn last year, from £2bn in 2009, according to an annual survey by the accounting firm.

BDO attributed the fall in reported fraud to two factors: large corporate frauds, can take more than a year to settle in court and may be settled this year, swelling the value of reported fraud; and that whistleblowers may be less active during an economic downturn.

“If an employee feels their job is under threat or they no longer have loyalty to their employer, the likelihood is that they will not stick their heads above the parapet to blow the whistle on fraud,” BDO said.

Last year, there were 372 fraud cases totaling £1.4bn in the UK, the survey found. The highest fraud was £170m and the second highest £161m

London, the North West and Wales are the UK’s top fraud hot spots, the survey found. By industry sector, 55% of reported fraud was in the finance and insurance sector, followed by the public sector (20%) and professional and scientific (12%).

Tax fraud was the most common type of fraud, followed by “third-party fraud, involving suppliers and customers, and then mortgage fraud.

Last November, a survey by KPMG found that a fifth of data losses reported globally in the private and public sectors came from “malicious attacks” inside an organisation.

The survey – based on reports of lost and stolen data worldwide – found that 20% of data loss incidents this year were caused by people within an organization, up sharply from 4% in 2007.