Boom time for criminals as fraud reports soar

REPORTED fraud in Yorkshire and the North East more than doubled in 2009, with new research warning it could rocket to “potentially horrendous” levels.

Figures from accountants and business advisers BDO found reported fraud increased by 111 per cent to 280m, a 147m leap on 2008’s record figure of 133m.

The increase in Yorkshire and the North East was the second largest rise in reported regional fraud levels, behind London and the South East, which experienced 117 per cent growth.

Simon Bevan, head of fraud at BDO, based in Leeds, said: “2009 saw the steepest increase since our report began seven years ago, with the average value of each fraud now over 5m compared to 1.8m in 2003.

“Based on my experience of the two previous recessions, I expect that reported fraud will treble over the next two years. There has always been a lag effect, with reported fraud continuing to rise for at least a couple of years after businesses start to come out of the recession.

“A large part of this will be a tidal wave of fraudulent borrowing that has only just started to appear, particularly through use of over-valued properties as security for loans, while the property market was booming. Currently many of these frauds are yet to be recognised by the banks, which still have them classified as non-performing loans.”

Nationally, reported fraud in the UK broke the 2bn barrier for the first time. That was a 76 per cent increase, with both the number and size of frauds increasing dramatically.

BDO warned annual reported corporate fraud could be as high as 5bn in a couple of years as more fraud is discovered.