Serious internal fraud detected through forensic investigation
A recent global economic crime survey has found that more than 60 per cent of UK firms have experienced fraud or economic crime in the last few years.
This was well above the global average of 46 per cent for this year and was higher than the last time the survey was conducted in 2020.
According to a separate study, the average cost to the businesses affected ranged from £800,000 to almost £4 million and 51 per cent of the fraud perpetrated was committed by external fraudsters.
However, this means that almost half of the fraud was committed by insiders. The sense of betrayal that is often felt by those affected can be devastatingly distressing, especially if the perpetrators have been employed for many years.
According to another recent report, 84 per cent of businesses polled experienced fraud last year, with more than a third of companies stating that fraudulent activity had increased.
In addition, the shift to home working was reported by many as a driving factor behind the increase in fraud, with 89 per cent saying it had a direct impact on the risk of fraud increasing.
Worryingly, despite this, 26 per cent of respondents said the level of fraud awareness among their employees has declined since the pandemic began.
However, 63 per cent admitted that they had not implemented fraud awareness training over the past year.
Roger Isaacs, Forensic Partner at Milsted Langdon, said: “These studies show that fraud is on the rise, with internal risks being as much a risk as external factors.
“Uncovering fraud committed by an employee can be challenging and even when discovered, employees can be reluctant to report matters to the police for fear of adverse publicity.“Even if cases are reported, the police often lack the resources or even the inclination to bring costly complex cases to court.
“It is for that reason that there has been an increasing interest in private prosecutions, supported by forensic accountancy reports.
A successful prosecution can not only act as a deterrent but can also result in money being recovered for victims by way of compensation or confiscation orders. These can have far-reaching effects and can even attach to assets held in the names of third parties, if a court can be persuaded that they have been acquired using the proceeds of crime.”
Sources: The Times, PWC
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