Businesses urged to protect themselves as fraud swallows £682m
Business losses reported to Action Fraud last year reached £682 million, with the highest losses resulting from corporate employee fraud.
According to data obtained by RSM UK from Action Fraud, the UK’s national fraud and cyber crime reporting centre, businesses submitted 59,192 reports about fraud in 2018-19, with an average loss of around £11,500 per case.
The highest losses resulted from corporate employee fraud (accounting for £214 million in losses), followed by mandate fraud (accounting for almost £100 million in losses).
RSM explained that mandate fraud occurs when an employee is tricked into redirecting a regular payment mandate to a fraudster's account.
Tim Merritt, fraud and forensics partner at audit, tax and consulting firm RSM, said: “The amounts being lost by business to fraud are eye-watering, but the figures probably underestimate total losses as unidentified frauds cannot necessarily be quantified.
“While some larger businesses are able to absorb the impact of fraud, for smaller and mid-sized firms, the effects can be more severe, even putting the future viability of the business at risk.”
Mr Merritt explained that preventing fraud need not be arduous or expensive.
“A robust anti-fraud and bribery policy supported by the right training, business processes and controls can be very effective,” he said.