Fraud at record high in UK

27 January 2010

27 January 2010 | Jake Kanter

Fraud reached a record level of £1.3 billion in the UK last year, according to KPMG.

It was at its highest level since 1987, when the consultancy began compiling its Fraud Barometer.

Total corruption for the past decade reached £7 billion, compared with less than £5 billion in the 1990s.

Fraud is on the rise mainly as a result of the downturn, although companies have become “better attuned” to it, with a greater focus on corporate governance, the report found.

KPMG recorded all forms of publicly reported fraud, including procurement cases. It said just two examples of purchasing corruption accounted for £7 million of overall fraud last year, but could not name those instances.

Corruption committed by company managers reached £335 million in 2009, compared to £129 million the year before.

Employees also racked up far higher losses, with cases totalling £232 million, more than double that in 2008.

Hitesh Patel, partner at KPMG Forensic, said the findings were the "tip of the iceberg".

“The credit crunch will undoubtedly make the situation worse, and we are yet to see the full impact of it. Computerization and globalisation have made fraud easier, quicker to carry out and easier to conceal,” he added.

The study echoed findings from accountancy firm BDO earlier this month, which said that the cost of corruption exceeded the £2 billion barrier for the first time in six years.

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