By Max Clarke
Businesses are facing greater threats to their bottom line as fraud edges past the £1bn mark for the first time.
“The evolution of ecommerce, as well as increased reliance on automated payment systems and the ability of professional criminals to stay one step ahead, has swollen overall UK fraud figures,” explains Hitesh Patel, UK forensic partner at KPMG who compiled the research.
As the recovery continues to progress at a snail’s pace, businesses across the UK are vying to curb costs to the point that internal investment has suffered, further damping growth.
This loss of £1.1bn from UK business’ profits- a 40% rise from 2010- significantly erodes businesses ability to grow, as Patel explains:
“But, fraud levelled at UK businesses tears at the very fabric of the economy. Although it is just as prevalent in larger organisations, the small and medium sized companies are more likely to suffer dire consequences as a result. For SMEs fraud can often lead to significant cash flow problems resulting in redundancies - and at worst a fight for survival.”
This is illustrated by a Wirral business brought to its knees by the in-house accountant who stole nearly £170,000 and then bragged about his lavish lifestyle on the internet. This instance led to multiple job losses while he took luxury holidays.
“The impact of fraud can be long lasting, affecting the organisation’s growth and competitiveness. It may dampen customer and staff confidence, cause reputational damage and detract from simply running the business,” he added.
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