Growing expectation that fraud will be reported & investigated
Fraud quadrupled in the charity sector and in the financial services sector last year, as reported cases reached an all-time high.
Fraudsters seized £2.11bn last year, a rise of 538% on 2003 figures. And the rise in value was matched by a sharp increase in volume—there were 577 cases last year compared to just 212 in 2003.
The financial services sector suffered the largest increase, with the total number of cases up by 72.4% and the value quadrupling to £899.7m, according to BDO FraudTrack, which records fraud cases worth more than £50,000.
The charity sector also saw a dramatic increase last year—the number of cases almost doubled and the value quadrupled to £8.5m.
In the past 15 years, across sectors, there has been an exponential increase in reported fraud. The total value of real estate, rental and leasing fraud, for example, has leapt from £1m to £276m.
Kaley Crossthwaite (pictured), partner and head of fraud at BDO, said: ‘While a significant amount of fraud still goes unreported, our research suggests that people are becoming a lot more courageous in coming forward to report it and recovering their assets through the criminal or civil justice systems.
‘There is now an expectation that fraud will be reported and investigated, both internally by corporations, charities, public sector entities and companies operating within regulated sectors.’
In some cases, celebrity endorsements were exploited to trick people into parting with sizeable amounts of cash. Some 730 sports stars, comedians and other celebrities were conned into a reforestation investment project in Brazil and China, before discovering it was a £100m tax scam.
Counterfeiting also proved profitable with fake brands producing £16.9m for criminals, triple the loot raised in 2016. The number of cases jumped from four to 19.
Sat Plaha, BDO partner, said: ‘The rising economic pressures and the continuing sophistication in technology mean that fraud is still a contemporary risk for most businesses, and therefore it is essential that they continue to deploy a proactive risk-based approach to protect themselves from harm’s way.’
