British businesses lost at least £40m last year from frauds perpetrated by their own employees, with London accounting for the largest chunk by far, new data published today has revealed.
Losses from employee fraud were highest in the Greater London area covered by the Metropolitan Police, at £7m in 2016/17, according to government figures obtained by accountants RSM.
City of London businesses suffered the second-largest losses, at £4.7m, meaning London as a whole accounted for 29 per cent of the total losses from employee fraud reported to ActionFraud, the UK’s national fraud and cyber-crime reporting centre.
Meanwhile the average size of the frauds reported in the City of London was the second-highest in the UK, at £338,380, with only Gloucestershire experiencing a higher rate of losses.
Essex businesses were hit by the third-highest losses, at £4.4m.
The number of cases of fraud has risen steadily over the last decade, according to Cifas, a fraud prevention body.
Staff simply stealing cash from their company is the most common reported internal fraud, accounting for more than a fifth of fraud cases. The second most common employee fraud is the manipulation of third-party accounts held by friends or families, Cifas reported earlier this year.
|Police force area||Total loss||No. of incidents||Average size|
|City of London||£4,737,320||14||£338,380|
The true extent of losses is thought to be significantly higher: the Office for National Statistics reports that crime surveys of England and Wales show a “substantially higher” incidence of fraud than official reporting.
Akhlaq Ahmed, forensic partner at RSM, said: “The levels of reported employee fraud and the resulting losses are already high, but this is likely to be the tip of the iceberg. Sadly, a great deal of employee fraud goes unnoticed and unreported, and businesses are simply not doing enough to prevent losses.”
He added: “In our experience, fraud is often carried out by employees who may have been in post for some time and who know where the weak points are. They can often be motivated by greed, lifestyle aspirations, debts or addictions.”