Crunch-hit staff turn to fraud

Published on Saturday 16 August 2008 15:44

BUSINESS fraud is on the increase on the back of the credit crunch, partly because employees are feeling the financial pinch, an accountancy firm has warned.

Saffery Champness has told its business clients to watch out for increased levels of fraud on all levels, from corporate identity theft to employees being creative with their expense claims.

Official figures show the financial damage to British business caused by fraud is around 50m a year.

Close Brothers Group, a merchant bank, said organised criminals are turning their attention to the corporate market because of increased vigilance against personal identity theft.

Ronnie Ludwig, a partner with Saffery Champness, said: "As the credit crunch bites deeper, we are seeing marked evidence of business fraud on the increase."

He said this ranges from corporate identity theft to staff falsifying expense claims to meet increased mortgage costs or household bills.

He added that there have been instances of employees stealing stock or equipment and selling it to raise cash.

He said criminals often execute an identify theft by making an unauthorised filing at Companies House. This can involve making changes to a registered office address or company director details.

Companies House does not have an obligation to inform a business of any of these alterations, but for a fee it will provide a monitoring service to tackle the problem.

Ludwig said businesses should also consider tighter procedures to stop employee fraud.

He said: "Whistleblowing should be considered. With tough trading times in many business sectors, the last thing a company needs is to be suffering hidden internal losses."