One in five UK businesses fell victim to fraud between 2018 and 2020, but the majority did not report it to the police, according to an extensive government survey of thousands of businesses.
THE report by the Home Office, which was written in 2020 but published only last week, looked at incidents of fraud suffered by companies in seven business sectors covering 20% of the entire industry over the three years before 2020.
During this period, the number of fraudulent incidents per business ranged from a low of one to 5,000 for a group in the wholesale and retail sector, and the average cost per business was approximately 16 £000.
“Generally [surveyed] business sectors, the incidence rate of any fraud in the 3 years prior to the interview was approximately 3,917 incidents per 1,000 businesses, suggesting high levels of repeat victimization,” the Department of Interior.
The Home Office extrapolated the data to conclude that all businesses across the seven sectors – including retail, construction and financial services – are believed to have suffered around 4.5million incidents of fraud between 2018 and 2023.
The Economic Crime Survey found significant under-reporting by businesses, with just 32% reporting their most recent fraud experience to the police and just 25% to Action Fraud, the national reporting service frauds.
Fraud against individuals is now the most common crime in Britain, with 3.7 million incidents checked in in the 12 months up to September of last year.
The Home Office said it conducted its business survey because “less is known about the extent of business fraud” because many financial crimes go unreported.
Although it took place in 2020, the poll was only released last Wednesday, the same day the Home Office released a new fraud strategy.
Shadow Attorney General Emily Thornberry wrote to Home Secretary Suella Braverman asking why the strategy did not include data on the value of the company’s losses from fraud and the hundreds of thousands of commercial fraud not recorded by the police.
In a letter seen by the Financial Times, Thornberry said the decision to exclude such large figures from the fraud strategy was “unexplainable and unjustifiable”. She added that they would have been even higher had the survey included all other industries and not been “sitting in a drawer for three years”.
In 2017, an independent “Annual fraud indicator” produced by private companies and academics estimated that the UK’s annual losses from fraud amounted to £190 billion, of which £140 billion suffered by the private sector – mainly due to the purchase fraud and payroll fraud.
Thornberry said it was “astonishing” that last week’s 22,000-word fraud strategy didn’t mention shopping or payroll fraud.
“It is conceivable that. . . the decision has been made – consciously or not – to downplay or outright ignore corporate breaches and losses, in order to focus more closely on the impact of fraud on the general public,” he said. she stated.
The Home Office said it was ‘absolutely committed to cracking down on scams’ and continued ‘to work intensely with partners in government, law enforcement and industry to protect the public and businesses against fraud”.
People familiar with the research said that since the survey was not a sample survey, it was not used to create a national estimate of the total cost of fraud to businesses. They added that there were plans for a follow-up survey over the next year, which would cover all sectors.
Separately, a study by trade body UK Finance on Thursday showed that almost all authorized push payment fraud, in which victims are tricked into transferring money to accounts whose owners are not those they claim to be, came either online or by phone.
Proposals that would have forced big tech and telecom companies to compensate victims were watered down ahead of the fraud strategy’s release, after concerns were raised in government about the impact on the sectors.
David Postings, managing director of UK Finance, said tech companies “should really put their hands in their pockets [to contribute towards stopping fraud]especially since they take advantage of it”.
Antony Walker, deputy chief executive of techUK, who speaks on behalf of the tech sector, said companies were “already taking a wide range of active measures to prevent fraud” and would work with others to implement the fraud strategy .
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