Warning: be vigilant as fraud has surged

Pension freedoms are putting people at risk

Updated: 

Fraud

Consumers and businesses are being warned to be vigilant against fraud as an accountancy firm found that nearly £800 million-worth of cases have been reported over a six-month period.

The total value of reported fraud between December 2014 and May 2015 was £798 million, marking an increase of nearly £80 million compared with the same period earlier, according to BDO.

The average cost per fraud was £3.27 million, which is almost double the £1.82 million average cost recorded 12 months ago, and shows that fraud is still a "big business", BDO's "fraudtrack" report found.

Around one-quarter of reported fraud involved consumers being conned, with people falling victim to £188 million-worth of losses.

Kaley Crossthwaite, partner and head of fraud at BDO, said: "Our analysis shows a resurgence in reported fraud, indicating that people are still not being vigilant enough and need to step back and think about how they personally or their business is susceptible to fraud."

She said that with the recently introduced pension freedoms allowing people more access to their cash, there is a risk that cases of "too good to be true" investment scams may increase.

Frauds covered in the report are those that have been declared publicly, such as being announced in the news or issued from a business.

Within the latest figures, frauds committed by employees cost UK organisations more than £46 million, BDO said. Common frauds included changing a supplier's details to a friend or family member's bank details.

Ms Crossthwaite said organisations need to be on the lookout for "worrying new trends" including false employees and contractors being created.

She said: "It is clear that businesses need to be more thorough in all due diligence carried out, not only on sale and purchase transactions but on their existing and new suppliers, customers and new recruits."

The report also found that London and the South East had the highest value of reported fraud cases, at £460 million over the six-month period. Yorkshire had the second highest total, at £166 million. At the other end of the spectrum, reported frauds in East Anglia amounted to £242,776.

Here is the value of reported frauds by region between December 2014 and May 2015, according to BDO (the figures do not add up to £798 million as some reported frauds were not linked to a specific region):

:: London and the South East, £460 million

:: Yorkshire, £166 million

:: East Midlands, £45 million

:: Northern Ireland, £42 million

:: North West, £19 million

:: North East, £11 million

:: West Midlands, £10 million

:: Wales, £8 million

:: West Country, £8 million

:: Scotland, £2 million

:: East Anglia, £242,776

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