Fraud levels increased in 2011, says BDO

Coins Tax fraud - especially VAT - tends to be the highest level of fraud in the UK

Reported fraud in the UK broke the £2bn barrier in 2011 but this was dwarfed by the levels of fraud that go unreported, an accountancy group has said.

Fraud rose by 50% on the previous year to £2.09bn, with more than a third of this the result of tax fraud, BDO said.

However, its head of fraud - Simon Bevan - said at least 10 times more fraud went unreported.

He said firms should take a more proactive approach to tackling fraud, especially in tough economic times.

BDO has been tracking fraud levels since 2003.

"The fact that reported fraud is up is worrying, but not at all surprising. When the economic climate is difficult there is even more focus on the bottom line and driving out unnecessary costs, so fraud is more likely to be uncovered," Mr Bevan said.

"But organisations need to be much more proactive when it comes to preventing fraud. Too often risk teams are either too externally focused or fail to look at fraud from a financial point of view."

Types of fraud

The retail sector saw a big jump in its share of all reported fraud. The sector's share of total reported fraud rose to 12% in 2011 from 2% the previous year, according to the BDO figures.

Tax fraud, notably VAT avoidance, accounted for 36% of all fraud.

The finance and insurance sector accounted for the lowest proportion of total fraud for five years.

However, Mr Bevan said that financial services were still too focused on cutting credit card fraud and phishing scams - when criminals try to gather personal information - rather than other areas of risk such as fraud surrounding mortgages or commercial lending.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features & Analysis

Elsewhere on the BBC

  • Arash AF8Naughty Brits

    From scrappy upstarts to legendary brands, six speed demons that hail from the UK

Programmes

  • A man holds a sign which reads Bring Back Our GirlsHARDtalk Watch

    Why there is still hope and optimism for the rescue of Nigeria’s kidnapped schoolgirls

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.