Businesses still not reporting fraud, according to latest report

A recent report has found that one in five UK companies fell victim to fraud between 2018 and 2020 but most of them did not report it to the police.

According to the report by the Home Office, written in 2020 but only published in early May this year, there are ‘high levels of repeat victimisation’, with most firms losing an average of £16,000.

According to the Home Office, across all surveyed business sectors, the incidence rate for any fraud in the three years prior to being interviewed was approximately 3,917 incidents per 1,000 businesses.

The survey also found substantial under-reporting by companies, with only 32 per cent reporting their most recent fraud to the police and only 25 per cent to Action Fraud, the current national fraud reporting service due for replacement by “a state-of-the art fraud and cybercrime reporting and analysis service” in mid-2024.

It also found that the sector most prone to suffer from fraudulent activity is the financial and insurance services industry, with 20 per cent of the businesses surveyed in that sector saying they had experienced fraud.

The Home Office’s report was published to coincide with the publication of the Government’s new fraud strategy, which aims to cut fraud by 10 per cent by the end of 2024.

However, it has been criticised by Shadow Attorney General Emily Thornberry, who has asked why the strategy does not include data on the value of company losses to fraud.

Ms Thornberry called the decision to exclude such significant figures “inexplicable and unjustifiable”.

She also wanted to know why the fraud strategy did not mention procurement fraud or payroll fraud when an independent report compiled in 2017 by private companies and academics estimated that the UK’s annual losses from fraud were up to £190 billion – mainly from those very frauds.

Helen Gregory, Forensic Director at Milsted Langdon, said: “Fraud is a massive problem for businesses, as this latest report shows. Where there has been repeated fraud, the owners need to understand how they were targeted so that they can develop processes that eliminate this risk.

“Employing the services of a forensic accountant can help business leaders and finance teams to identify what has been taking place and how much money has been lost. However, more importantly, this can support steps that minimise the chance of fraud in future.”


Sources: FT

Posted in The Forensic Blog.