Last updated: 11 Mar 2024 01:00 Posted in:
The cost of fraud to UK businesses more than doubled in 2023 to £2.3bn, according to the latest fraud report from accountancy firm BDO.
However, the study reveals the true level of fraud is likely to be significantly higher, with many organisations not reporting that they been the victim of fraud. The latest Crime Survey for England and Wales revealed that fewer than one in seven fraud offences are reported to the police.
While the number of high value cases (over £50m) in BDO’s FraudTrack report increased by 60% in 2023, the total number of reported cases also rose, up by 18% to a three-year high. It uncovered a large increase in online scams, phishing and system breaches, and large spikes in Authorised Push Payment transactions in which fraudsters trick their victim into transferring money to them.
Kaley Crossthwaite, forensic partner at BDO, said: “We are not surprised by this increase in reported fraud numbers which is consistent with the surge in frauds that our forensic investigations teams are seeing on the ground. Many people choose not to report fraud because of shame or embarrassment. Businesses are also reticent about coming forward because of fears around negative publicity, reputational damage, and a lack of faith that the authorities will take action.
“While we hope the introduction of the Government’s online fraud charter will encourage the technology sector to narrow the opportunities for online fraud, the sad reality is that the fraudsters will be looking to stay one step ahead by exploiting new options like AI.
“All businesses are at risk, and many need to take urgent action to bolster their defences against fraud and financial crime. The ‘failure to prevent fraud' offence introduced by the Economic Crime and Corporate Transparency Act 2023 may just provide the extra incentive to do so.”
“While we hope the introduction of the Government’s online fraud charter will encourage the technology sector to narrow the opportunities for online fraud, the sad reality is that the fraudsters will be looking to stay one step ahead by exploiting new options like AI."
Kaley Crossthwaite, Forensic Partner, BDO