Mortgage sector accounts for 18% of all UK fraud
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Mortgage fraud accounted for 18% of all reported fraud in 2009, and 27% of all fraud in the finance and insurance sector, according to research by BDO Stoy Hayward.
Accountancy firm BDO, which also has one of the country’s largest teams of specialist fraud investigators, says fraud in the UK broke through
the £2bn barrier for the first time last year.
In keeping with its poor reput-ation the financial sector went from bad to worse, recording a 70% increase in fraud by value compar-ed with the previous year to £1.34bn.
BDO says mortgage fraud usually involves a large loan being taken out on an overvalued property, with a crooked buyer acting in collusion with a corrupt valuer and lawyer.
With this type of fraud teams work on many properties, one after the other.
Fraud in the financial sector now accounts for 64% of all reported fraud by value but BDO says that in its experience more than 90% of larger frauds do not get reported to authorities.
Simon Bevan, head of fraud at BDO, says: “Last year saw the steepest rise since our records began seven years ago. The average value of each fraud is now over £5m compared with £1.8m in 2003.
“Based on my experience of previous recessions I expect reported fraud to treble in the next two years. There’s always been a lag, with fraud rising for a couple of years after economic recovery.”
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