Police forces are failing to stem rising tide of fraud, warns SFO

Businesses face a rising tide of white collar crime but resources to tackle the problem are being scaled back, the Serious Fraud Office said yesterday.

Businesses face a rising tide of white collar crime but resources to tackle the problem are being scaled back, the Serious Fraud Office said yesterday.

Unveiling the unit's annual report, Rosalind Wright, the director of the SFO, said that although the cost of fraud to the UK was reaching as much as £13bn a year, competing police resources are hitting fraud squads.

Ms Wright said the West Midlands area highlighted the problem. Its fraud squad used to be one of the largest in the country but in the last two years it has been cut by 75 per cent.

"Birmingham is a very busy commercial centre with a lot of commercial crime. But the man in charge of its fraud squad has been reduced in seniority from chief superintendent to chief inspector," Ms Wright said.

"It's happening in the Metropolitan Police as well. The Met's fraud squad is being merged into a larger crime unit. This makes it very difficult to maintain the impetus in the fight against fraud," she added.

The SFO was founded in 1988 to fight big and complex cases and combines teams of lawyers, accountants and the police. The SFO has been promised a budget increase of 20 per cent or £3.5m next year but the help it is getting from the police is falling, Ms Wright said. "Many banks and insurance companies don't even report fraud any more, partly because of inadequate police resources, so that a significant amount of fraud isn't being investigated by anyone."

The total value of frauds the SFO was investigating last year was £1.4bn. A survey, by the National Economic Research Associates, for the SFO and the Home Office put the total cost of fraud to the UK economy as between £7bn and £13bn a year.