Reported fraud up by 50%

Fraud has rocketed in the past year, although scams against financial services companies have fallen, according to new figures.

Accountancy firm BDO’s 2011 FraudTrack report says that nearly £2.1bn of fraud was reported last year, compared to £1.4bn in 2010.

This represents the highest reported figure since the survey was launched in 2003 when the value of reported fraud was £331m.

The 2011 FraudTrack report, which is based on data from all reported fraud cases over £50,000, shows that there were 413 reported cases, at an average value of £5m in 2011. This compares with 372 cases in 2010, at an average value of £3.7m.

But while the finance and insurance sectors accounted for 56% of total reported fraud in 2010, this proportion was down to 27% in 2011.

Commenting on the figures, BDO head of fraud Simon Bevan said: “Financial services institutions have invested heavily in systems and technologies to prevent and track fraud, so the fact that reported fraud in this sector has decreased as a percentage of overall fraud suggests this approach is working. But there is still a long way to go.”

He said that many in-house fraud teams were made up of ex-police officers who tended to concentrate on the fraud threats posed by external criminals.

But Bevan said the biggest fraud threats to financial services businesses were often posed by in-house employees and management.