Fraud levels to treble during recession firms warned

REPORTED fraud has reached a staggering £1.2bn in the first six months with the total number of cases jumping up by a third.

Figures released by BDO Stoy Hayward show that fraud cost the country £960m in June alone.

But Simon Bevan, head of fraud services at the business advisory firm, is warning that those figures are likely to treble during the course of the recession.

“From a fraud point of view we are a long way from bottom. There is a whole wave of commercial lending fraud that is yet to crash around the ears of the UK and overseas banks.”

Mr Bevans is predicting fraud levels of around £3bn a year and said it will be no surprise to see that reported mortgage fraud has rocketed. He also believes that “cooking of the books” by management will rise by 50%.

And while procurement fraud appears to have dropped as companies focus on cost reduction, analysis of this year’s data will lead to more frauds being uncovered.

Meanwhile, retail and counterfeiting problems are continuing to plague firms as fraudsters move from selling pirated DVDs to sophisticated wholesale manufacturing.

According to BDO, London and the South East are the hardest hit, but Northern firms have experienced a substansial increase in counterfeit fraud.

“No-one is immune from the problem and all firms should increase their fraud awareness during these difficult economic times,” said Mr Bevan.