Businesses report £262m in fraud losses in 2016-17

Have you safeguarded your business against fraud?

Data obtained by RSM under the freedom of information act has revealed that businesses reported £262m in fraud losses last year.

The statistics, obtained from ActionFraud, the UK’s national fraud and cyber-crime reporting centre, revealed that businesses submitted almost 40,000 reports to the police about fraud in 2016-17.

The data, which RSM is releasing to coincide with International Fraud Awareness Week, shows that the highest losses sustained by businesses resulted from incidents of cheque, plastic card and online bank fraud (£46.7m).

This was followed by corporate employee fraud at £40.4m and mandate fraud at £32.2m. Mandate fraud is where fraudsters obtain details of direct debits, standing orders or account transfer details and amend them to transfer monies to other accounts.

The highest levels of fraud losses reported by businesses were in the Met Police Force area (£32.2m), followed by Essex (£29.2m) and Sussex (£23.9m).

The highest number of reports (14,697) concerned ‘retail fraud’ committed against shops and restaurants. Such crimes would include attempting to obtain a refund for stolen goods, switching labels on clothes to obtain a cheaper price or ordering food in a restaurant and leaving without paying. This accounted for £7.7m in losses.

Akhlaq Ahmed, forensic partner at leading audit, tax and consulting firm RSM said: “Frauds against businesses can range from the very simple to the very sophisticated.

“Businesses are losing hundreds of millions of pounds through fraud every year, much of which can be prevented by simple controls.

“Businesses are far too complacent about fraud risks and are not doing enough to address them.

“Companies should be much more proactive in ensuring their defences, both online and offline, are fit for purpose. Those that don’t take action can find themselves very exposed.”