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Tuesday 19th July 2011
20 July 2011
Reported fraud in the UK has reached a plateau, according to legal firm BDO’s six-monthly update – but the figures may be misleading.
FraudTrack's half-year figures showed fraud reported between 1 December 2010 and 31 May was around £920m. This compares with £1.06bn for the same period the previous year.
The average value of a single reported fraud also dropped to around £4.5m, compared with just under £6m this time last year. “This is the most significant drop in four years, yet with 205 reported cases, it also represents the highest number of reported incidents,” says the report.
However, BDO’s experts believe “the figures indicate a disparity between how fraud is being tackled in the private and the public sectors”.
Fraud reported by the public sector has almost doubled since last year, from around £216m in 2010 to £431m in 2011. But fraud reported in the finance and insurance sectors has almost halved in the same period, from around £524m in 2010 to £274m in 2011.
“What’s particularly interesting about these figures is that they don’t necessarily correlate with what we’re seeing in the market,” said Simon Bevan, head of fraud services at BDO, who has been observing fraud statistics for 20 years.
“Do these figures indicate that less fraud is happening? Not in my view. We think this represents a reluctance to report fraud to the authorities, particularly in the financial services sector.”
Bevan said he believes that around 90 per cent of fraud goes unreported, so the results for the financial and insurance sectors may not be particularly surprising.
“The fact is that many people who fear that reporting fraud will lead to bad publicity also question whether reporting fraud to the police or Serious Fraud Office is the most effective method of dealing with it. We believe this is a key reason why reported fraud figures are down.”
Public administration fraud cases now represent 46 per cent of all reported fraud in the UK.
In terms of types of fraud reported, procurement fraud – often referred to as the most common type of fraud – was only reported twice within the period, compared with theft and cash fraud, which was reported 59 times.
The lower level of reported fraud in the private sector might also indicate that more and more organisations are finding a different method for tackling fraud, said Bevan. “They will most likely be taking the view that the civil approach means they are more likely to recoup lost money and less likely to risk reputational damage.”
Other news for Wednesday 20th July 2011:
Nottingham Uni nears FM deal for new hotel
BIFM backs code to improve internships
Fraud figure dip may be deceiving
Government turns to PFI for new schools
M&S convicted over asbestos failings
Blog: CSR under the spotlight
Reported fraud in the UK has reached a plateau, according to legal firm BDO’s six-monthly update – but the figures may be misleading.
FraudTrack's half-year figures showed fraud reported between 1 December 2010 and 31 May was around £920m. This compares with £1.06bn for the same period the previous year.
The average value of a single reported fraud also dropped to around £4.5m, compared with just under £6m this time last year. “This is the most significant drop in four years, yet with 205 reported cases, it also represents the highest number of reported incidents,” says the report.
However, BDO’s experts believe “the figures indicate a disparity between how fraud is being tackled in the private and the public sectors”.
Fraud reported by the public sector has almost doubled since last year, from around £216m in 2010 to £431m in 2011. But fraud reported in the finance and insurance sectors has almost halved in the same period, from around £524m in 2010 to £274m in 2011.
“What’s particularly interesting about these figures is that they don’t necessarily correlate with what we’re seeing in the market,” said Simon Bevan, head of fraud services at BDO, who has been observing fraud statistics for 20 years.
“Do these figures indicate that less fraud is happening? Not in my view. We think this represents a reluctance to report fraud to the authorities, particularly in the financial services sector.”
Bevan said he believes that around 90 per cent of fraud goes unreported, so the results for the financial and insurance sectors may not be particularly surprising.
“The fact is that many people who fear that reporting fraud will lead to bad publicity also question whether reporting fraud to the police or Serious Fraud Office is the most effective method of dealing with it. We believe this is a key reason why reported fraud figures are down.”
Public administration fraud cases now represent 46 per cent of all reported fraud in the UK.
In terms of types of fraud reported, procurement fraud – often referred to as the most common type of fraud – was only reported twice within the period, compared with theft and cash fraud, which was reported 59 times.
The lower level of reported fraud in the private sector might also indicate that more and more organisations are finding a different method for tackling fraud, said Bevan. “They will most likely be taking the view that the civil approach means they are more likely to recoup lost money and less likely to risk reputational damage.”
Other news for Wednesday 20th July 2011:
Nottingham Uni nears FM deal for new hotel
BIFM backs code to improve internships
Fraud figure dip may be deceiving
Government turns to PFI for new schools
M&S convicted over asbestos failings
Blog: CSR under the spotlight