Fraud breaks £2bn barrier

Reported fraud in the UK broke the £2bn barrier in 2009 for the first time, according to new research from accountants and business advisers BDO.

The company said that the amount lost by businesses and the public sector to larger frauds increased last year by 76% during the recession, with both the number and size of frauds increasing dramatically.

BDO predicts that this rise is a precursor of things to come, and warns that annual reported corporate fraud could be as high as £5bn in a couple of years, as more fraud is discovered – both through management being focussed by the recession on questioning costs, and because tighter cash flow and credit makes fraud harder to hide.

According to Fraud Track, financial sector fraud increased 70% on the previous year’s figures to £1.34bn.

BDO said fraud against the finance sector now accounts for 64% of all reported fraud by value.

“It is our experience that well over 90% of larger frauds do not get reported to authorities (civil actions are more common, but even with these there is usually a settlement before the case concludes),” BDO added.