FRAUDS carried out on UK firms rocketed to more than £700m in first half of the year as the credit crunch worsened – although the damage done to Yorkshire firms declined, new figures show.
Reported fraud cost UK businesses £705m, up 74 per cent on the same period last year while the value of reported fraud in April alone was £317m, analysis by accountants and business advisers BDO Stoy Hayward shows.
But the latest FraudTrack figure
s, published today, show firms in Yorkshire and the North East were hit by frauds worth £4,790,592, compared to £13,605,842 for the same period last year, which was then second only to London. Now reported fraud in Yorkshire and the North East amounts to 0.68 per cent of the overall national total.
London and the South East were hit by £634m of reported frauds and firms in the North West suffered to the tune of £47m, reflecting the concentration of financial services in the capital.
Simon P. Bevan, head of BDO Stoy Hayward's fraud services team, based in Leeds, said the real level of business fraud could be even higher as the figures only included frauds which have been revealed.
"What we are essentially saying is that management are robbing you blind, suppliers are ripping you off left right and centre and regulators are breathing down your neck.
"Regulatory pressures will increase and regulators will become more intrusive."
He added: "Our latest figures show only the value of reported fraud.
"These figures don't include losses that may have been incurred by rogue traders, fraud that's not yet been uncovered, or which businesses have discovered but don't wish to expose."
Reported fraud cost the UK's bankers and insurers more than £636m – 90 per cent of the total cost of fraud, a 15-fold increase from fraud levels last year. Employee fraud rose to 11 per cent of all fraud, compared to 2.5 per cent in the same period last year.
The figures also showed that management fraud accounted for 46 per cent of fraud cases and third-party fraud accounted for 32 per cent, costing businesses a total of £541m.
Mr Bevan said the spiralling personal debt and hard-up employees had caused problems for businesses.
The survey also showed that greed was still the main motive for fraud, followed by debt and gambling.
Mr Bevan called for longer sentences for those convicted of frauds in the UK.
He added: "Custodial sentences for fraud have increased, from 2.88 years in 2005 to 3.14 years in 2008. These are still low when compared with those of other countries such as the US, where large frauds can result in prison sentences of up to 20 years."
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