BUSINESS fraud recorded in Scotland has dropped by 46 per cent in the first half of this year, bucking the UK trend, according to a new report from accountant and business adviser BDO Stoy Hayward.
But experts have warned that the figure may rise again as the credit crunch begins to bite and people become more financially desperate.
The latest FraudTrack analysis from BDO has revealed that fraud reported north of the Border in the f
irst six months of 2008 was £1.85 million – down from £3.5m during the same period in 2007.
The figure is in stark contrast to the 74 per cent rise in the rest of the UK, where fraud cost companies £705m in the six-month period. UK-wide, the value of reported fraud in April 2008 alone was £317m.
The new figures come less than a week after it emerged that the owners of Oban-based mineral water brand StrathLomond are facing a fraud of almost £16m. The £15.8m fraud was discovered during an audit that alleged costs at the plant had been deliberately concealed by a former financial controller.
Judith Scott, forensic director at BDO Stoy Hayward in Scotland, warned that, while better than the rest of the UK, the actual cost of fraud to Scottish businesses could actually be higher.
She said: "While the Scottish figures are encouraging, it must be recognised that the latest figures show only the value of reported fraud.
"When you factor in the fraud committed by rogue traders, fraud that is yet to be uncovered and that which companies have discovered but don't wish to expose, the real cost to Scottish businesses could be much higher."
Scott said she believes that, as economic conditions worsen, the problem of business fraud is set to grow.
She added: "The combination of spiralling personal debt and desperate employees spells real danger for businesses.
"Our national fraud team has witnessed a dramatic increase in the number of banks, corporates and public sector organisations contacting us about our fraud investigation and prevention services and we expect this trend to continue."
Iain MacMillan, director of CBI Scotland, welcomed the positive figures north of the Border, but urged companies to be on their guard.
He said: "It is important that companies, as part of their risk assessment, keeps the possibility of fraud on the agenda." He added: "Fraud and theft clearly occurs when the culprit doesn't have enough resources or money of their own and resorts to criminality.
"As the fortunes of the economy gets worse, I think keeping an eye on fraud in the workplace is something that owners and managers of businesses need to focus on."
The full article contains 455 words and appears in The Scotsman newspaper.
