Fraud costs a business an average of £16,000 each time it is hit, according to a Government survey of thousands of businesses.
One in five UK companies fell victim to fraud between 2018 and 2020 but the majority did not report it to police, says a Home Office report.
The report, which was written in 2020 but published only last week as part of the Government’s new fraud strategy, surveyed companies hit by criminal activity in seven business sectors covering just 20 per cent of all industry in the three years to 2020.
93pc of SMEs unable to recover more than half of fraud losses – Nearly half of businesses surveyed say they have been hit by fraud within last 12 months, with average amount lost £241,000
Across all seven industries – including retail and financial services – the incidence rate for any fraud was approximately 3,917 incidents per 1,000 businesses, showing high levels of repeat victimisation.
The Home Office extrapolated the data to conclude there would have been about 4.5m incidents of business fraud between 2018 and 2023.
However, the Home Office survey – released this week as part of the new strategy – did not calculate company losses to fraud in total.
Invoice fraud: many small businesses aren’t aware of the risks – A worrying number of small businesses aren’t aware of the risk posed by invoice fraud, even though they could lose thousands of pounds.
An independent Annual Fraud Indicator published in 2017 estimated that the UK’s annual losses from fraud were up to £190bn, of which £140bn was withstood by the private sector, mainly through procurement and payroll scams.
Fraud against individuals is now the most common crime in Britain, with 3.7m incidents recorded in the 12 months to September last year.
Financial scams alone are estimated to cost the UK about £7bn each year.
Only one third of companies reported their most recent experience of fraud to the police and only 25 per cent to Action Fraud, the national reporting service.
Meanwhile, research by trade body UK Finance on Thursday showed that all “authorised push payment” (APP) fraud, in which victims are tricked into transferring money to accounts whose owners are not who they pretend to be, originated either online or via phone.
David Postings, chief executive of UK Finance, told the Financial Times that tech companies should be helping to fund stopping criminal activity, as they were profiting from it.
