UK fraud exceeds €1bn
Corruption is a bigger problem than ever before according to a recent report by KPMG. UK fraud reached €1.24bn in the first 6 months of 2011 up from €685m in the same period last year.
The average case value of private sector fraud has increased from €2.81m in 2010 to €4.73m this year. “The evolution of ecommerce as well as increased reliance on automated payment systems has swollen overall UK fraud figures” said Hitesh Patel UK partner at KPMG.
Although fraud is just as prevalent in larger organizations Patel believes that corruption can be disastrous for small to medium sized companies. “For SMEs fraud can often lead to significant cash flow problems resulting in redundancies and at worst a fight for survival.”
In May Nick Small head of a UK environmental information business had to lay off 16 employees after an accounts clerk stole €191,000 from his business. “The problem was not only had he stolen our money but he had run up debts with companies as he paid their money into his accounts and was intercepting their letters so we had no idea” Small told the Liverpool Echo.
Internal fraud in the UK caused €253m worth of damage this year with the average management fraud costing €8.2m a case and the average employee case costing €897,000. “Operating in positions of trust and authority, helping them conceal their tracks with greater ease - the more senior the employee the more damage they can inflict when acting fraudulently” said Patel.
The London 2012 Olympics have also been the victim of fraud. In April of this year a gang of con men stole more than €2m by posing as representatives of Skanska one of the major contractors at the Olympic park in Stratford. Sierra Express Media reported that the fraudsters stole €2.59m of the Olympic Development Authority’s money.
“Companies should arm themselves with a set of controls that enable greater detection such as whistle blowing lines and fraud risk reviews while thoroughly mining the wealth of data that sits within an organisation to identify fraudulent activity” said Patel.
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