The value of UK fraud hit a 15-year high of £2.11bn in 2017 as more companies made it a priority to tackle wrongdoing, according to a new study. Accountancy firm BDO examined reported fraud cases worth more than £50,000 and found that the total number rose to 577 in 2017, compared with 212 in 2003. The average amount stolen in each incident rose to £3.66m, up from £1.5m in 2003. The biggest rise was in the financial services industry, where the total value of fraud rose to £899.7m last year, compared with £214.9m in 2016. Numbers of reported cases almost doubled to 100 last year, compared with 58 in 2016. The report also found fraud cases on the rise in the retail sector. The number of cases rose from 16 in 2016 to 29 in 2017 and the value from £4.2m in 2016 to £337.3m last year, largely because of one big case. The value of fraud detected in the public sector fell to £368.5m last year, compared with £1.37bn in 2016. However, the 2016 number was distorted by a £1bn value added tax fraud case. Kaley Crossthwaite, partner and head of fraud at BDO, said that more companies were uncovering and reporting fraud.
Companies, charities and public sector organisations were also being more proactive about recovering assets through the courts. “A significant amount of fraud still goes unreported but the figures suggest that people are more willing to come forward to report it,” she said. “There is an expectation that fraud will be reported and there is a real drive to ensure that the police are doing something about it — rather than a company simply firing a fraudster, for example. Bribery and fraud are also becoming more of a priority and shareholders expect corporates to have policies and action plans in place,” she added. Employees were behind the most fraud in 2017 with £474.3m siphoned off in this way. Tax fraud cost £351.8m. Money laundering, management fraud in financial accounts and corruption were other common problems. A number of high profile financial sector frauds have been prosecuted through the courts in the past year. The cases include the jailing of two former HBOS bankers and four associates for a £245m fraud perpetrated from the bank’s Reading branch between 2003 and 2007, which “ripped apart” small businesses. The fraudsters spent money on prostitutes, yachts and luxury holidays. Two city traders Georgy Urumov and Vladimir Gersamia were also jailed for a £141m fraud against Russian bank Otkritie.