Business fraud in Scotland soars

The economic crisis is behind a sharp increase in fraud

Reported cases of business fraud have risen by 450% during the first six months of 2009, according to the accountants BDO Stoy Hayward.

Fraud cost Scottish companies £10m in the first half compared with just over £1.8m for the same period last year.

BDO Stoy Hayward had predicted a rise in fraud during the recession but said the increase was "staggering".

The true figure could be even higher because a lot of fraud goes uncovered and many companies avoid reporting it.

Judith Scott, director of forensic accounting at BDO Stoy Hayward in Scotland said: "Victims of fraud primarily focus on recovering assets, preventing future fraud and, most pertinently, minimising publicity."

Scottish figures mirror those across the UK where a total of £960m worth of fraud has been reported in the first six months of the year.

London and the South East remain hardest hit by fraudsters, but the North East of England also saw substantial increases.

Mortgage fraud

BDO Stoy Hayward said mortgage fraud, where there was an over-valuation of property prices, had been exposed by the recession.

Its research also showed that the finance and insurance sectors continued to suffer.

There was also sharp rises in retail fraud and counterfeiting.

FraudTrack is prepared by BDO Stoy Hayward and is based on reported fraud cases of over £50,000.