Thursday 19th February, 2015

According to the latest BDO FraudTrack report the total value of fraud in 2014 was £720m, a decrease of 31% from the previous year and the lowest value since the report started in 2003.

The FraudTrack report, examines all reported fraud cases over £50,000 in the UK, found that the total number of reported cases rose to a record 546 cases in 2014 from 525 in 2013.

Kaley Crossthwaite, Partner and Head of Fraud, BDO LLP commented:

"One of the reasons why we have seen the lowest total value of fraud since 2003 is due to a growing trend for high value complex fraud to be dealt with outside of the judicial system and out of the public eye. Companies are increasingly assessing the reputational cost to their brands of a public case against the cost of pursuing the perpetrators of the fraud through the courts."

The report also shows that many of the cases dealt with publicly in 2014 involved 'old fashioned' manipulation of victims and authorities, and relatively low-tech fraud schemes. Submitting false invoices whether to get cash, support insurance claims or VAT refunds make up a large number of these cases, often in conjunction with other types of fraud.

The top two industries most susceptible to fraudulent activity are, Public Administration at £254m (35%of all activity) and Finance and Insurance costing £236m (33%of all activity).

Types of fraudulent activity:

• Tax fraud - £235m (33%of all activity)
• Money laundering - £144m (20%of all activity)
• Third party fraud (suppliers & customers) - £102m (14% of all activity)
• Employee Fraud - £71m (10% of all activity)
• Mortgage fraud - £57m (8% of all activity).