Fraud Passes Pounds 1bn Mark

Article excerpt

Byline: By Neville Dean Special Correspondent

Business fraud reached record levels in the UK last year, passing the pounds 1 billion mark for the first time, according to new research.

The level of reported business fraud increased by 40 per cent from just under pounds 1 billion in 2005 to pounds 1.37 billion in 2006, according to the annual FraudTrack report from accountants BDO Stoy Hayward.

The number of reported frauds worth over pounds 50,000 rose by a third to 295. The research found that only 15 per cent of businesses actually reported frauds against them to the police.

The Fraudtrack report estimates that, as a result, the actual direct cost to UK businesses of fraud was at least pounds 5 billion last year.

It says that reported fraud in the UK has increased in value by 314 per cent - from pounds 313 million - since 2003.

Much of the business fraud last year was based around high value VAT fraud, or "carousel" fraud as it is known.

Nine cases were prosecuted in 2006 costing the Exchequer pounds 372 million.

Simon Bevan, the national head of BDO Stoy Hayward's fraud services team, said: "Although fraud against businesses is a rapidly growing crime, the reality is that most business victims do not see the prosecution of fraudsters as a priority - under a third of financial directors surveyed saw this as one of their top priorities if they discovered a fraud.

"They are much more concerned with making sure the fraud cannot happen there again and with recovering the stolen money: and businesses wanting to recover money need to do this through the civil courts if they want it done quickly and effectively. …