Fraud costs

The global average cost of fraud has risen by nearly 20% to £2.91trn since the start of the recession and now stands at almost 5.5% of GDP, according to accountants BDO LLP’s detailed report, Financial Cost of Fraud Report 2013, which is based on 15 years of data. The UK loses £85.3bn to fraud each year, the report found. However, by using proven counter fraud action measures, the UK could save £34bn each year. For example, anti-fraud measures reduced losses in the NHS by up to 40% within 12 months, while the US Department of Agriculture reduced its losses across an $8bn programme by more than 22%. Jim Gee, director of counter fraud services, BDO LLP, said: “Assessing the true cost of fraud, as opposed to the cost of reported fraud, presents some very scary numbers. Putting in place pre-emptive measures could make very significant improvements to the financial health and stability of UK plc.”