Accountants and business advisers BDO discovered that despite the value of fraud in the region decreasing, the number of reported cases in the West Midlands still account for 12% of all UK reported fraud by volume.
Counterfeiting fraud, which rose significantly in the region over the past year, was largely inflated due to a case involving a jewellery gang who profited by as much as £1m from selling fake 22 carat gold bangles. The largest single reported fraud in the West Midlands in 2018 was committed by a Dunstable man who stole more than £2.5 million from the evangelical Christian charity he worked at as an accountant.
The total value of fraud UK-wide more than halved in 2018. Following a record 15-year high in 2017, reported fraud fell from £2.1bn to £746.3m. This is the lowest level of fraud since 2014 when the value fell to £720.3m, however experts at BDO say 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 commented: “While the continued reduction in the value of fraud in the West Midlands may seem positive, 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.
“There is no chance for complacency in the face of increasingly sophisticated scams. As the largest reported fraud in the region shows, sometimes the perpetrator of fraud is not a faceless name or external scam, but an employee in a position of trust with access to key data or the firm’s financial accounts. Companies and organisations must continue to adopt stringent systems and provide discrete channels for employees to securely flag potential cases of fraud for further investigation.”
Regional hotspots
Yorkshire took over from the West Midlands in 2018 as the largest hotspot for fraudsters outside London, with a 51.2% increase to £52m. This large increase is due in part to a significant jump in the value of third-party fraud (315.6%) in Yorkshire with the average value of fraud increasing by 51.2% to £1.3m up from £860k. Within the Midlands region as a whole, the value of fraud was over £3m more in the West than in the East.
