Fraud: Every UK business will be impacted say experts
British businesses face an all-time high level of fraud, losing hundreds of billions of pounds yearly as criminals take advantage of outdated systems and AI.
According to a report by accountancy firm Crowe UK and law firm Peters & Peters, the UK economy loses approximately £219bn annually due to fraud, with the private sector suffering the brunt, losing around £157.8bn.
“Fraud is endemic. It is getting worse, and it does not get the airtime it deserves,” stated Alex Jay, partner at Stewarts. He warned that “almost every business will lose money to fraud.”
Not only is fraud widespread, but it can also take many forms, making it even more difficult for businesses to keep their fingers on the pulse.
As Daniel Astaire, managing partner of Grosvenor Law, highlighted, fraud can range “from simple over-claiming of expenses by employees to more complex investment frauds and false opportunities created by seemingly honest business partners.”
He added that they are seeing even more different types of fraud taking shape recently.
Cyber attacks hit the headlines
One type is cyber fraud attacks, which have been all over the headlines recently after M&S, the Co-op and Harrods were all attacked earlier this month.
“A key challenge is that fraud is very hard to prevent entirely,” noted Jay.
He pointed out that for businesses with larger workforces, it is even harder to manage as they cannot always be on high alert against everyone.
Among those employees, sometimes even those who are highly trusted can be deceitful.
Jay revealed he had seen cases where people known and trusted by the business had defrauded the company.
Systems to prevent fraud
How can businesses navigate this grey area? Astaire stated that leaders must “have strong systems and policies in place”.
Additionally, specialists must be brought in quickly when fraud occurs, from carrying out fraud risk assessments to keeping a closer eye on staff.
Jay explained that when it comes to “preventing further losses and advice on recovery, time is almost always of the essence.”
Businesses need to be “vigilant” and have a good sense, added Astaire.
Last month, City PM revealed the National Anti-Fraud Centre urged the UK government to halve the crime rate by 2028, focusing on fraud, which accounts for 40 per cent of crimes.
Speaking at the time, Janine Hirt, CEO at Innovate Finance, said: “Given the scale of the [fraud] threat posed to consumers and businesses alike, we urgently need a more collaborative, targeted, and effective strategy that aspires to smash fraud in the UK.”