Fraud has risen four-fold in just a year in Yorkshire, report says

In 2014 there was £49.6m of fraud involving 56 cases. But that rose to £208.5m in 2015 from just 39 cases, the figures from the accountants and business advisers BDO revealed.

The figures were contained in the latest FraudTrack report which dealt with reported fraud cases involving £50,000 or more across the UK.

Across the whole of the UK, fraud increased 110 per cent from £720 million to £1.5 billion over the same period.

The report found that the total number of cases fell by 5.2 per cent, with only 519 reported cases in 2015 compared to last year’s 546 cases.

But the average value of fraud meanwhile has risen 121 per cent to £2.9m with some of the largest cases brought to court reaching over £250m.

The report’s author, Kaley Crossthwaite, Partner and Head of Fraud at BDO, said: “Whilst the value of financial services fraud would appear to have jumped sharply, the numbers have been skewed slightly due to a small number of very

large cases.

“Stripping these ‘exceptional’ items out would show an apparent fall in volume and value year on year.

“Sadly this is not the full picture.

“Increasingly we are seeing high value complex fraud being dealt with outside of the judicial system as companies prefer to deal with these situations behind closed doors to avoid the reputational damage to their businesses.

“Our experience would suggest that both volume and value in real terms continue to rise despite efforts by companies in the sector to strengthen their processes.”

Ms Crossthwaite added: “The low number of reported cases in the retail sector is an indication that most fraud is dealt in-house and not reported, due to the reputational damage and potentially a further loss of profits as customers lose trust and security in the retailer who holds their personal data.

“Unfortunately most fraud is committed by people in trusted positions which can make it difficult to pick up but leads to a great sense of betrayal when it inevitably does.

“We see so many instances of company/ charity accountants, directors, senior employees, bank employees and secretaries defrauding their employers, customers or counterparts, often after many years of loyal service and usually to fund gambling habits or lavish lifestyles.

“The good news is that most fraud is preventable. By ensuring that no single individual has unfettered access or responsibility over company accounts, and by undertaking spot checks business account and financial processes, it should be possible to create a system that removes those in positions of trust from temptations path altogether.”

In one case, a former NHS worker stole medical equipment worth £1.3 million, which he then sold on. Another case involved a woman who embezzled £726,000 from trusts established to help charities.

Financial services continues to be the sector attracting the highest level of fraud.

One of the biggest increases in the financial services sector was in mortgage fraud. Despite the number of cases almost halving from 24 in 2014 to 13 in 2015, the value of fraud almost tripled from £57m to £151m due in large part to a £130m mortgage fraud case in the North-East.