Business Fraud On The Increase

Fraud in UK business has increased due to the credit crunch, according to new research.
Accountants BDO Stoy Hayward, found that business fraud had increased by 74%, with fraud committed by employees rising to 11%, compared to 2.5% in the same period last year.

Particularly hard hit were the banking and insurance sectors, where 90% of the fraud took place.

Greed was given as the motive in 36% of the cases, with debt the reason in 25% of cases and gambling at 24%.BDO predicts that as economic conditions continue to deteriorate, UK business fraud will grow.

"The combination of spiralling personal debt and desperate employees spells real danger for business," said Simon Bevan, head of its fraud services team."What is really scary is that these figures don't even include losses that may have been incurred by rogue traders...When you add in the fraud that's not yet been uncovered, or which businesses have discovered but don't wish to expose, the real cost to UK industry could be much, much higher," he added.

The majority of frauds were committed by senior staff and regular suppliers, with management fraud accounting for 46% of cases, according to the report.