14 August 2007, 12:52 PM

  • Low risk of prosecution is contributing to an increase in business fraud, it has been claimed.

The research, by accounts network BDO Stoy Hayward, found that fraud involving businesses in the UK has increased – up 42% on the same period last year.

Simon P Bevan, national head of BDO Stoy Hayward’s Fraud Services team, said, “When it comes to frauds against businesses, if you are discovered there is only a small chance of being prosecuted. When a fraud is discovered, all but the very largest are not a priority for the police given their limited resources.

“Businesses, not surprisingly, focus on getting the money back and protecting their reputations – so few of such cases, less than 15%, result in a prosecution. In this case, the worst a fraudster will face is losing their job and having to repay most of their ill-gotten gains.”

The research found that business fraud typically involves employees or directors abusing a position of trust, and the larger the sum stolen, the less likely the fraudster is to be prosecuted.

The Midlands is the UK’s biggest fraud hotspot, the research found, amounting to £312m worth, however London recorded the most separate incidences of fraud.