Fraud soars to record high
Published August 2010
£1 billion was lost through fraud in the first half of this year according to accountancy firm BDO, with the average fraud valued at £6 million. This is the first time in the seven years that BDO has been monitoring fraud levels that the billion pound barrier has been breached.
As a result, companies need to be more vigilant now than ever.
Notably, the amount of revenue dilution fraud and insider dealing has risen. Around 16 percent of the reported fraud was initiated by internal management, while 17 percent came from third party customers and suppliers.
However, this escalation is not a direct result of the economic climate. Instead the downturn has brought greater regulatory scrutiny and an increased number of disgruntled individuals who were ready to report their former employers.
However, it is not just the business world that is paying the price of fraud.
Despite significant falls in the levels of road accidents and vehicle crimes, the cost of comprehensive car insurance soared by more than 12 percent in the second quarter of 2010, fuelled an invisible rise in insurance fraud.
In fact, the cost of fraud in home and motor insurance has risen to £1.9 billion a year, with around £5.2 million of fraudulent claims going undetected every day. This costs households £44 annually in premiums according to the Association of British Insurers (ABI).
