But scams against financial services firms are down, says survey

Fraud has rocketed in the past year, although scams against financial services companies have fallen, according to new figures.

Accountancy firm BDO’s 2011 FraudTrack report says that nearly £2.1bn of fraud was reported last year, compared to £1.4bn in 2010.

This represents the highest reported figure since the survey was launched in 2003 when the value of reported fraud was £331m.

The 2011 FraudTrack report, which is based on data from all reported fraud cases over £50,000, shows that there were 413 reported cases, at an average value of £5m in 2011. This compares with 372 cases in 2010, at an average value of £3.7m.

But while the finance and insurance sectors accounted for 56% of total reported fraud in 2010, this proportion was down to 27% in 2011.

Commenting on the figures, BDO head of fraud Simon Bevan said: “Financial services institutions have invested heavily in systems and technologies to prevent and track fraud, so the fact that reported fraud in this sector has decreased as a percentage of overall fraud suggests this approach is working. But there is still a long way to go.”

He said that many in-house fraud teams were made up of ex-police officers who tended to concentrate on the fraud threats posed by external criminals.

But Bevan said the biggest fraud threats to financial services businesses were often posed by in-house employees and management.