Fraud in Scotland leaps 88 per cent in a year to £30.4m

Sat Plaha

Research carried out as part of BDO LLP’s annual FraudTrack report shows that Scotland ranked as the fourth most defrauded region in the UK by value as fraud rose by 88 per cent from £16.2m in 2017 to £30.4m in 2018.

Accountants and business advisers BDO discovered that while the number of cases reported fell by 14 per cent to 43 (down from 50 cases in 2017), the rise in the cost of fraud in the region was largely due to fraud in the public administration sector which rose by 565.3 per cent in value up from £2.9m in 2017 to £19.5m in 2018.

The costliest reported fraud that took place in Scotland in 2018 was part of a probe by HM Revenue and Customs into a suspected £12 million VAT fraud.

In 2018, the region recorded £14.9m of highly organised tax fraud cases with employee fraud and third-party fraud also rising in value, up 62.8 per cent and 136.5 per cent respectively.

The total value of fraud UK-wide more than halved in 2018. Following a record 15-year high in 2017, reported fraud fell from £2.1 billion to £746.3m.

This is the lowest level of fraud since 2014 when the value fell to £720.3m, however, BDO said the true cost of fraud to the UK could be as high as £37.5bn.

Sat Plaha, partner and national head of regional forensic services at BDO said: “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.”

Tags: fraud, BDO

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