Fraud at record high
Jul 20 2010
White collar crime in the UK is at an all-time high.
Fraud losses rocketed to £1.1 billion for the first half of this year, almost the same amount as the whole of 2008 and up from £960 million compared with the first six month of 2009, according to accountancy firm BDO.
This is the first time fraud levels have soared above the £1 billion barrier during a six- month period since BDO first began conducting its report seven years ago.
Simon Bevan, head of the Fraud Services Unit at BDO, says: ‘In the past we have seen a focus on procurement type frauds, such as public and private sector organisations paying too much for goods and services. However, we are starting to see more revenue dilution fraud, where management either set up “companies within companies” or divert lucrative contracts away from the company to third party accomplices.’
Bevan adds that there has also been an increase in insider dealing: ‘The Financial Services Authority has been cracking down on this, with a number of individuals receiving criminal convictions and/or confiscation orders.'
The average value of a single act of fraud has increased to almost £6 million, up from £5 million last year.
According to BDO, London and the South East are the main hotspots for fraud activity.
Comment by David Lewis
Tuesday 20th July 2010It is not surprising that fraud has reached higher levels. Difficult times lead to streamlining of staff and therefore increased potential for fraud not being spotted. At the same time shortage of funds at a personal level mean can increase the temptation for people to commit fraud. It is interesting to note the changing nature of fraud from this article. Fraud prevention is a challenge for SMEs. One issue is that anti-fraud measures are not perceived as adding value to the business and often people shut the door after the horse has bolted. There are however some measures where the prime benefit is to improve management information and cash flow and where a by-product is to help prevent fraud and assist detection. I wrote an article on the subject last year talking. Here is a link http://www.accountingweb.co.uk/print/node/377835
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