Monday, 30 June 2008

57% of all reported fraud is inhouse

Here are some Statistics which raise some issues but should be kept in the context of the world's largest financial city:

* Reported fraud cost the UK £705 million in the last six months an increase of 74% of the same period a year ago.
* Of that £636 million was in the finance and insurance sectors.
*London and the South East account for £634 million of the total.
* Management fraud accounts for 46% of fraud reported.
* Other employee fraud is up from 2.5% of the total a year ago to 11%.
* When the employee fraud is added to the management fraud we get a total of 57% of all fraud is in house or £402 million.

I rang the company who provided these numbers, BDO Stoy Haward, to ensure that I had understood them and to understand what the difference was between management and employees - employees are people, according to BDO Stoy Haward, who are not managers.

The report only covered frauds in excess of £50,000 and I guess the insurance and banking sectors being tightly regulated are more likely to report than other sectors of the economy.

What is clear is that in a recession some people become more likely to take the risk of committing fraud in order to fund a lifestyle, a credit card or a mortgage. This probably applies to minor fraud, shoplifting, burglary and mugging too. It will become worse if unemployment grows and there will doubtless be headlines to worry us when it does.

Just to cheer you up the report also mentions that the cases of fraud against the inland revenue is £22million which compares rather favourably with the same period last year when it was £336 million, unless, of course, they have left the records on the train.

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