By Vivienne Russell | 23 July 2012
More than half of all fraud reported over the six months to May was committed against the public sector, according to a report by accountants BDO.
But the firm’s interim FraudTrack report, which analyses cases worth more than £50,000, also found that the total value of fraud dropped by more than 50% over the same period last year.
Fraud totalling £424m was reported to the police between December 2011 and May 2012. Of this, £253m (60%) came from public administration, mostly tax fraud. However, this was 41% down on the 2011 figure of £431m.
Last year, the finance and insurance sector accounted for almost three-quarters (74%) of all reported fraud. However, today’s interim figures showed this had plummeted to just 17%.
Retail fraud increased significantly, up to £49m from £11m last year.
In terms of the type of fraud committed, the most prevalent was tax fraud at £249.5m (59%). Mortgage and procurement cases both dropped dramatically. Just £9m of mortgage fraud was reported, compared with £82m last year. Procurement fraud fell from £25m last year to £3m.
Commenting on the drop in overall reported fraud, Simon Bevan, head of fraud services at BDO, said: ‘This really is a dramatic fall. This year’s interim figures are not even a quarter of last year’s total, which was more than £2bn between December 2010 and November 2011.’
He added that, despite the drop in value, more cases were being prosecuted.
‘We suspect that organisations are only bringing in the authorities for small, relatively simple frauds. If that’s the case, I’m in no doubt that reputation management is a key factor in this decision. Organisations just don’t want to air their dirty linen in public. It would appear that the police are no longer the first port of call when it comes to dealing with the large, complex frauds that can be so damaging to reputation,’ Bevan said.
More than half of all fraud reported over the six months to May was committed against the public sector, according to a report by accountants BDO.
But the firm’s interim FraudTrack report, which analyses cases worth more than £50,000, also found that the total value of fraud dropped by more than 50% over the same period last year.
Fraud totalling £424m was reported to the police between December 2011 and May 2012. Of this, £253m (60%) came from public administration, mostly tax fraud. However, this was 41% down on the 2011 figure of £431m.
Last year, the finance and insurance sector accounted for almost three-quarters (74%) of all reported fraud. However, today’s interim figures showed this had plummeted to just 17%.
Retail fraud increased significantly, up to £49m from £11m last year.
In terms of the type of fraud committed, the most prevalent was tax fraud at £249.5m (59%). Mortgage and procurement cases both dropped dramatically. Just £9m of mortgage fraud was reported, compared with £82m last year. Procurement fraud fell from £25m last year to £3m.
Commenting on the drop in overall reported fraud, Simon Bevan, head of fraud services at BDO, said: ‘This really is a dramatic fall. This year’s interim figures are not even a quarter of last year’s total, which was more than £2bn between December 2010 and November 2011.’
He added that, despite the drop in value, more cases were being prosecuted.
‘We suspect that organisations are only bringing in the authorities for small, relatively simple frauds. If that’s the case, I’m in no doubt that reputation management is a key factor in this decision. Organisations just don’t want to air their dirty linen in public. It would appear that the police are no longer the first port of call when it comes to dealing with the large, complex frauds that can be so damaging to reputation,’ Bevan said.
