have issued a stark warning that the government's efforts to curb the rapid rise in business fraud are failing due to a combination of ineffective
legislation and insufficient resources.
Speaking at a CreditUK industry debate on business fraud held in Manchester last week, they urged businesses to lobby government for more support.
Lawyer Steven Philippsohn, a member of the Fraud Advisory Panel, said it was
estimated that fraud was currently costing businesses Â£14bn per year.
He said: "Fraud has a devastating effect on businesses, jobs, savings and
pensions, and the National Criminal Intelligence Service has warned that
organised crime now derives as much money from financial crime as from drug
Highlighting the scale of the problem, he told the audience of North West
business leaders that a report published last year estimated that 51% of all
businesses in the UK have been victims of fraud in the last two years.
According to Mr Philippsohn, government legislation designed to help
businesses prevent and detect fraud has only been partially successful. "It
is still the case that almost half of all frauds are only discovered by
accident," he said.
Detective Chief Superintendent Ken Farrow, head of the City of London Police
Economic Crime Department admitted that many frauds across the country are
never investigated because of the lack of police resources.
He said: "There are five, even six figure frauds being reported that forces
do not have the manpower to investigate. At the last count across the UK
there were at best 600 officers dedicated to solving economic crime."
Steve Hancock, head of group money laundering prevention at financial
services group Prudential plc, criticised anti-money laundering legislation
for 'clogging up the system'. He said: "Current legislation says employees
have a duty to report any suspicious transaction and if they don't they can
be prosecuted. As a result they become paranoid and file hundreds of useless
reports that all have to be processed."
The debate marked the launch of CreditUK, a series of two-day conferences
and exhibitions taking place next year across the UK.
Geoff Chown, managing director of organisers Capital Corporate Events, said:
"CreditUK will not only address fraud but also a host of other crucial
issues relating to credit and risk assessment that have a significant impact
on every sector of the UK's business community."
The first CreditUK takes place at Manchester's International Convention
Centre on March 25 and 26 2004, sponsored by the UK credit reference agency
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