Midlands faced with “worrying” rise in fraud cases
FRAUD in the Midlands has rocketed four-fold to £260m in the last 12 months compared to £58.5m for the same period last year, according to accountancy firm BDO’s annual Fraud Track report released today.
The region has the second highest reported fraud figures outside of London, with 80 cases in the Midlands ranging in value from £50k to £110m. The largest case was a £110m fraud on 20 financial institutions. Others include six men from Birmingham being jailed for their part in a £45m VAT scam and a trio being charged with defrauding TV giant Virgin Media of up to £40m.
Across the UK, the value of reported fraud exceeded £2bn last year – an increase of almost 50% since last year’s £1.4bn and the highest ever figure for the BDO survey that was launched in 2003.
Sat Plaha, forensic partner at BDO in Birmingham, said: “Although the increase in reported fraud in the UK and the Midlands is worrying, it is not surprising. In time of economic uncertainty, there is increased concentration on the bottom line, so fraud is more likely to be uncovered.
“Fraud in the construction industry continues to be very low, representing only 0.05% of reported cases in the Midlands. Given that fraud and corruption have been a reality in the construction industry for a long time, it seems more likely that this is due to fraudulent activity not being reported, rather than it not occurring. It will be interesting to see how this changes in the wake of the Bribery Act.”
BDO’s Fraud Track, which collates data from all reported fraud cases over £50k between 1 Dec 2010 and 30 Nov 2011, also highlights a boom in the retail sector. Retail now represents 12% of all fraud committed, compared with just 2%the previous year.
Tax fraud accounts for the highest percentage of fraud committed, at just over 36% and with an average cost of £13m – significantly higher than the average cost of all frauds (£5m).
