Fraud levels increased in 2011, says BDO
- 9 January 2012
- From the section Business
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.