Fraud cost UK companies almost £2.1bn in 2009, a rise of 76 per cent on the previous year, according to research from BDO Stoy Hayward.
Research from the accountancy firm shows losses from frauds reported by UK companies hit the highest total since BDO began keeping records in 2003. The company says the worst is set to come and predicts reported fraud will treble over the next two years.
Mortgage fraud accounted for 18 per cent, or £375m, tax fraud 15 per cent and money laundering 3 per cent.
Management fraud, in which senior executives issue misleading financial statements, leapt by 48 per cent last year, accounting for £503m of total losses, or 24 per cent.
Frauds involving the misuse of assets, typically other people’s investments, property and savings, has increased 325 per cent from £58m to £250m.
BDO says that the report is “a precursor of things to come” and warns that annual reported corporate fraud could be as high as £5bn in a couple of years as more fraud is discovered.
BDO head of fraud Simon Bevan says: “There is a tidal wave of fraudulent borrowing that has only just started to appear, particularly through use of over-valued properties as security for loans, while the property market was booming. Currently many of these frauds are yet to be recognised by the banks, which still have them classified as non-performing loans.
“It is only when specialist recovery departments start thorough investigations and eventually litigating against alleged dishonest borrowers and their complicit advisers that the true nature of these potentially horrendous fraud losses will come to light.”