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Business fraud breaks the 2 billion pound barrier
Accountancy and business adviser BDO LLP have published their latest research which shows that reported business fraud has risen by 76% to hit £2.1 billion - the first time the figure has ever broken through the £2billion ceiling.
It is suggested that due to the recession, management teams are questioning costs more closely than ever before, resulting in higher detection and subsequent reporting. The BDO LLP research found that fraud committed by mid-level management was often not carried out for personal gain, but to cover income streams and help them retain jobs.
However the research also found that greed was cited as the motive for fraud in over 80% of reported fraud cases. Furthermore, BDO suggest that: "Fraudsters will go out of their way to embed themselves in a business for personal gain, and they also make sure that they won't stand out from the crowd. From investigating hundreds of frauds in recent years, BDO finds that, sadly, it is often the most trusted people in an organisation that might defraud that business". For more on the motives behind fraud, you might be interested in reading the Fraudster's Modus Operandi here.
Other key figures from the research include:
Financial fraud: Fraud in the financial sector rises 70% to reach £1.340billion. This figure now means that financial sector fraud accounts for 64% of all reported fraud.
Mortgage fraud: Mortgage fraud accounts for 18 per cent of all reported fraud this year.
Misuse of assets: Frauds involving the 'misuse of assets' has increased 325 per cent from £58million to £250million.
Retail Fraud: We have seen fraud boom in the retail sector with fraud increasing by 730 per cent to £123million.
Travel Fraud: This year has seen an increase in fraud in the hotel and catering sector, including an increase in villa fraud - a problem which travel fraud forum PROFiT are trying to combat.
You can read more on the BDO LLP website at: http://www.bdo.uk.com/bdo/live/news/2010/fraud-breaks-the-2billion-barrier.html
12th January 2010
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