Employees account for 80% of company fraud

30/11/2007

Employees are to blame for 80% of company fraud, according to a new report, costing businesses a total of £40m each day.

Research from Glovers Solicitors found that in eight out of 10 cases of corporate fraud, an employee within the company had some kind of involvement.

Tony Bourne, a senior partner at Glovers, said: “Over £40m is lost every day to fraud in the UK, and while you may think that you have a loyal workforce, 90% of fraudulent employees have been with their employer for more than a year and 20% for more than a decade.”

A report commissioned earlier this year by accountancy firm BDO Stoy Hayward, found that business fraud in 2007 was up 42% on last year, costing a total of £538m for the first half of the year alone.

According to the report only 15% of business fraud involving an employee or director results in an actual prosecution.

Simon Bevan, the national head of BDO Stoy Hayward’s Fraud Services Team, said: “When it comes to fraud against businesses, if you are discovered there is only a small chance of being prosecuted.

“When a fraud is discovered, all but the very largest are not a priority for the police given their limited resources. Businesses, not surprisingly, focus on getting the money back and protecting their reputations – so few of such cases, less than 15%, result in a prosecution.

“In this case, the worst a fraudster will face is losing their job and having to repay most of their ill-gotten gains.”