Huge increase in fraud in the Midlands – BDO report
A REPORT by accountancy and advisory firm BDO has revealed that fraud in the Midlands has increased hugely.
Its BDO FraudTrack Report revealed that the value of fraud in Midlands rose by a massive 1,052% last year.
Fraud in the Midlands increased from £33m in 2014 to £384.5m in 2015 with the number of cases rising 25% from 70 to 94.
In the UK generally the total value of fraud more than doubled to £1.5bn from £720m, an increase of 110% from the previous year, and the highest value since 2011.
And the average value of fraud more than doubled from £1.3m to £2.9m.
Financial Services fraud was up 138% to £567m in 2015 from £238m in 2014.
The report, which examines reported fraud cases over £50,000 in the UK, finds that the total number of cases, however, fell by 5.2%, with only 519 reported cases in 2015 compared to last year’s 546 cases.
Third party fraud within financial services showed the largest increase in value year on year, with a £197m increase in reported fraud in 2015. In 2015, the £210m of third party fraud within the sector, included a fake invoices case, an investor con and a £142m case where six businessmen were charged with conspiracy to commit fraud on broadband installation contracts against financial institutions.
On a more positive note, the financial services sector saw a decline in employee fraud cases compared with 2014. The number of cases fell from 31 to 15 with the value also falling from £9m to £4.5m.
BDO’s Kaley Crossthwaite commented: “Whilst the value of financial services fraud would appear to have jumped sharply, the numbers have been skewed slightly due to a small number of very large cases.
“Stripping these ‘exceptional’ items out would show an apparent fall in volume and value year on year. Sadly this is not the full picture. Increasingly we are seeing high value complex fraud being dealt with outside of the judicial system as companies prefer to deal with these situations behind closed doors to avoid the reputational damage to their businesses.
“Our experience would suggest that both volume and value in real terms continue to rise despite efforts by companies in the sector to strengthen their processes.”
In terms of fraud per location, London and the South East continues to grow as the hotspot for reported fraud in UK, with the value of fraud in the area increasing to £600m in 2015 from £483m in 2014, and accounting for 40% of all fraud overall.
However, while London & South East remained at the top of the table, the most substantial increases regionally were seen in the Midlands, Yorkshire and North East England.
