Losses to fraud rose by 69% last year, says report
Millions of pounds have been lost due to a dramatic rise in construction fraud triggered by the credit crunch, according to a report released by Kroll.
The annual Kroll Global Fraud report found that the average construction company's loss to fraud has increased by 69%, driven largely by tough economic conditions.
In the past three years, companies lost an average of £7.9m, compared with £2.5m last year.
A total of 890 senior executives participated in the worldwide survey, which covered ten industries, with just over one-quarter based in Europe.
More than 95% of the construction companies surveyed said they had suffered from corporate fraud in the past three years – up by 77% from last year's survey.
The most frequent types of fraud occurring in the construction industry include theft of physical assets or stock (32%), financial mismanagement (31%), management conflict of interest (29%) and corruption and bribery (28%).
Blake Coppotelli, senior managing director in Kroll's Business Intelligence & Investigations division said: “The findings show that fraud is not only widespread but also growing in the construction industry and we expect to see this even increase further as conditions become tougher for business and the full impact of the credit crunch unfolds.”
Electrical and Mechanical Contractor