The Avanti Group PR code81345782170: Warning to businesses as fraud bill hits £85bn
by Karin S. NAThe British
economy is losing £85.3bn every year to fraud, according to a new report.
The estimate
is far higher than official estimates and highlights the damage fraud is
causing to the UK economy.
Accountancy
firm BDO, which compiled the research, said fraud remains a “challenging and
expensive problem” which leads to “less financially stable and profitable
companies” as well as “reduced job security and lower disposable incomes for us
all”.
The report
is being published just days after 12 men were arrested for allegedly trying to
take control of Santander’s computers to steal millions of pounds from the
bank.
BDO said the
report is one of the most detailed studies in the world about the total cost of
fraud.
The UK
figure has been calculated by studying fraud data from around the world over
the last 15 years and establishing what percentage of the world’s GDP is being
lost to fraud.
The report
says that 5.47pc of GDP is now being lost to fraud, up by 20pc compared with
the average loss of 4.57pc between 1997 and 2007.
Jim Gee,
director of counter fraud services at BDO, said the most common forms of fraud
involved procurement and payroll for businesses. Examples include services and
goods not being supplied after payment, or companies being overcharged.
Mr. Gee said
fraud remains “the last great unmanaged business cost”.
He stated:
“Assessing the true cost of fraud, as opposed to the cost of reported fraud,
presents some very scary numbers. Putting in place pre-emptive measures could
make very significant improvements to the financial health and stability of UK
plc.
“Fraud remains
a challenging and expensive problem, and its economic effects are clear –
affected public services, less financially stable and profitable companies,
reduced job security and lower disposable incomes for us all. The financial
crisis, where fraud has risen significantly, has clearly provided the ideal
conditions in which fraud can grow.”
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