In the first half of 2010, businesses in Yorkshire lost 18m to fraudsters
It may seem an obvious statement, but it’s not just individuals who are affected by fraud. Organisations of all sizes, both public and private, can also be victims of fraudulent activity. The true scale of fraud in the UK has been revealed by new figures published by KPMG. The data shows that, with businesses already battling the recession, their exposure to fraud has rocketed.
Although Government agencies have borne the heaviest burden, the private sector is also being increasingly targeted by fraudsters. The private sector suffered 266m of losses out of a national total of 1.1bn. Year-on-year, this represents an increase of more than 30%.
23 large fraud cases involving figures over 100,000 were heard in Yorkshire courts in the first 6 months of 2010, according to Vivienne Osborne (Forensic Director at KPMG’s Leeds office). In one case, a teacher from Leeds was jailed for perpetrating 1.7m mortgage fraud. In another, a finance director from Bradford was sent to prison for illegally pocketing 1.3m from her employers. The development of e-commerce and automated payment systems, as well as the growing sophistication of professional criminals, who are responsible for the majority of fraudulent activity, have been blamed for the increase.
She also pointed out that whilst larger organisations are just as likely to be victims of fraud, it is the small and medium-sized firms that tend to be hit hardest when fraud occurs, with “significant cash flow problems…redundancies…at worst a fight for survival” on the cards.
Internal fraud perpetrated by company employees has risen from 181m in the first half of 2010 to 225m over the same period this year. KPMG emphasised the importance of companies ensuring they have the necessary tools in place to prevent and detect fraudulent activity within their own ranks. This might include whistle-blowing lines, and, more generally, a thorough, ongoing analysis of any financial and accounting data through which instances of fraud might be revealed.
Accountants in Yorkshire can help ensure your business is safeguarded against fraud.
