Around 60% of midsized UK businesses were hit by fraud in 2020, top new survey suggests

A new poll from major accountancy firm BDO has revealed the extent to which the Covid-19 pandemic has left British businesses exposed to fraud.

To contribute to the City firm’s annual Fraud Track survey, which has monitored fraud trends at UK firms since 2003, BDO commissioned a Censuswide survey of 500 directors and business owners at companies with 200 or more employees.  The survey found that six in ten mid-sized businesses in the UK were hit by fraud in 2020, with an average loss totalling £245,000.

Nearly 40% of companies surveyed said they had seen an increase in attempted fraud last year compared to 2019.

More than a quarter of business owners told researchers they had suffered security breaches from cyber-attacks since lockdowns were imposed and more and more business was done online.

Asked whether they felt their firm has been more exposed to fraudsters since the pandemic hit, 76% of business owners and directors said yes - and 66% said they are concerned about being targeted by scammers in 2021.

Around half of the frauds reported by surveyed businesses came from external parties. But a shocking 34% of business owners said their defrauding had “involved collusion” between employees and scammers, and 21% said their own employees had been behind the fraud perpetrated.

However, in another worrying sign, 26% of executives surveyed said that their firm still has no fraud response plan in place.

And 61% of those surveyed said that their lack of cash flow as a result of Covid restrictions is actually set to “limit their investment in fraud detection and prevention tools over the coming year”.

Kaley Crossthwaite, head of fraud at BDO, said: “The sudden shift to remote working brought about by COVID-19 has amplified cyber-security threats. Fraudsters are developing increasingly sophisticated tactics at an alarming rate, and the mass digitisation of the workplace has outpaced many firms’ ability to secure themselves against exploitation

“The way business owners and directors act now will be critical in defining to what extent the pandemic facilitates a drain of IP and competitiveness. Our research shows that risk has increased and reported fraud is high, but without additional funds allocated to it we’re sitting on a ticking time bomb. 

"Combatting the digital crime wave requires responsible investment to support business resilience.”