Employee Fraud 'Doubles in 2005'

The cost of employee fraud to companies has reportedly almost doubled over the past two years, a new study of reported cases claims.

The survey reveals that the value of employee fraud is up by 81 per cent this year to £78 million, compared with just £43 million in 2003. Employee fraud now accounts for a fifth (20 per cent) of all reported fraud in the UK, up from 12 per cent in 2004.

The research by BDO Stoy Hayward documents 182 fraud cases during the first ten months of 2005 worth a total of £399 million, compared with 164 cases, worth £542 million, during the whole of 2004. The accountancy firm points out that there has been an overall drop in incidents of fraudulent activity this year, but large-scale employee fraud is climbing.

The annual FraudTrack research covers all reported fraud cases in the UK worth £50,000 or more and shows that tax fraud against HM Revenue & Customs has fallen this year compared with 2004.

Fraud investigator and partner at BDO Stoy Hayward, Andrew Durant, told Personnel Today: "I am disappointed to see another rise this year. Companies clearly need to do more to reduce this serious threat to their business. Failing to do so could lead to their demise."

BDO Stoy Hayward that companies ensure they have adequate recruitment screening procedures in place, crack down on wrong behaviour and ensure employees know who to report suspicious activity to, in order to tackle fraud.