The BDO’s most recent FraudTrack report found that Scotland ranked as the fourth most defrauded region in the UK by value, as fraud rocketed by 88 per cent from £16.2 million in 2017 to £30.4 million last year.
The analysis, which examines reported fraud cases over £50,000 in the UK, discovered London and the South East to be the biggest hotspot for fraud, accounting for over 60 per cent of the UK’s recorded fraud as a whole (£474 million). Yorkshire placed second, with an increase of 51.2 per cent from £34.4 million to £52 million, closely followed by North West with £51.9 million.
The report uncovers that while the number of fraud cases reported fell by 14 per cent (from 50 cases to 43), the increase in the cost of fraud in Scotland was primarily due to fraud in the public administration sector which rose by 565.3 per cent in value, jumping from £2.9m to £19.5m in one year. The costliest reported fraud that took place in the country in 2018 was into a suspected £12 million VAT fraud by HM Revenue and Customs.
Across the UK, the manufacturing sector witnessed the most substantial increase in the value of fraud as the total spiked by 1014.3 per cent from £2 million to £22.8 million and recorded cases rose by 37.5 per cent (from 8 to 11). The utilities sector also experienced a dramatic increase, with the value of fraud rising more than 1400 per cent to £9.3 million, despite the number of reported cases dropping by a third.
In 2018, Scotland recorded £14.9 million of highly organised tax fraud cases with both employee fraud up 62.8 per cent and third-party fraud rising by 136.5 per cent.
In spite of Scotland’s high figures, the total value of fraud UK-wide has more than halved. Following a record 15-year high in 2017, reported fraud fell by 62.5 per cent in the year, from £2.1 billion to £746.3 million. Fraud cases also decreased by 9 per cent, from 577 to 525. Additionally, the average value of fraud has dropped from £3.7 million to £1.4 million in 2018.
This is the lowest level of reported fraud since £720.3 million was recorded in 2014, and yet, accountants and business advisers BDO said the true cost of UK fraud could be as high as £37.5 billion.
Partner and national head of regional forensics services at BDO, Sat Plaha, concluded:
“The increase in sophisticated high value fraud in Scotland is a concerning trend. This is all the more alarming when our experience suggests that as few as one in 50 cases of fraud in the UK are likely to be reported so the figures only shine a spotlight on the visible part of a much wider problem.
It is essential that businesses and government alike continue to deploy a proactive risk-based approach to protect themselves from harm’s way. Education and retraining of the workforce in how to detect fraud is vital.”
Here at Keith Tuck Solicitors, our qualified team of lawyers have many years of experience in dealing with fraud cases and can help you each step of the way. Whether you have been accused of mortgage fraud, investment fraud, internet fraud, pension fraud, or insurance fraud, do not delay and get in touch with one of our specialist fraud lawyers today via the online enquiry form.