THE NUMBER OF reported business fraud cases has increased, according to BDO’s six-monthly report.
The Fraud Track update for the six months to 31 May 2011 showed the value of fraud committed dropped to £920m, compared with more than £1bn for the same period last year. The average value of a single fraud also dropped to £4.5m from £6m for the equivalent period last year, the most significant drop in four years.
However, the 205 cases reported represents the highest number of reported incidents to date.
The finance and insurance sectors might be “leading the way” in dealing with the issue via civil rather than criminal means, said Simon Bevan, head of fraud services at BDO.
“Do these figures indicate that less fraud is happening? Not in my view. Rather, we think this represents a reluctance to report fraud to the authorities, particularly in the financial services sector,” said Bevan.
“As the old adage goes, ‘90% of fraud goes unreported’ – so this isn’t particularly surprising. The fact is that many people who fear that reporting fraud will lead to bad publicity also question whether reporting fraud to the police or SFO [Serious Fraud Office] is the most effective method of dealing with it.”
Reported cases in the finance and insurance sectors were worth £274m in 2011, down from about £524m in 2010.
Fraud reported in public sectors almost doubled since last year, to £431m in 2011 from about £216m in 2010.
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