Losses from fraud in UK exceed £1bn

UK fraud losses broke the £1bn barrier for the first six months of the year but the figure fell by almost 95 per cent in Yorkshire.

Between January and June 2010, UK fraud losses rocketed to 1.06bn, almost the same as for the whole of 2008, according to a six-monthly update on reported fraud by business advisers BDO.

But in Yorkshire it fell to just under 15m, almost a 95 per cent decrease on last year's record figure of 280m.

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The region is fifth in the national league table of corporate fraud, behind London and the South East, Wales, the North West and the Midlands.

Nationally, this is the first time fraud levels have gone above 1bn during the interim period in the seven years BDO has been conducting its survey.

The average value of a single fraud went up to almost 6m from 5m last year, which BDO said shows fraud is big business.

Simon Bevan, above right, head of the fraud services unit at BDO in Leeds, said: "In the past we have seen a focus on procurement type frauds i.e. UK public and private sector organisations paying too much for goods and services.

"However as the recession continues we are starting to see the other side of the fraud equation, namely revenue dilution fraud.

"We are seeing companies where management commit fraud by either setting up 'companies within companies' or diverting lucrative contracts away from the company to third party accomplices."

BDO says the average fraud will top 7m by the end of 2010.