The number and value of business fraud cases going through the criminal courts is falling dramatically, according to research from accountants BDO Stoy Hayward.

BDO Stoy Hayward’s annual FraudTrack research identified 267 reported cases of business fraud (worth above £50,000) in 2007 with a total value of £1bn. This compares to 2006, when it identified 295 cases with a value of £1.4bn, a reduction of 24%.  

When large VAT frauds are removed, the figures are even starker, with non-VAT fraud cases of just £496m reported in 2007 (compared to £913m in 2006 – a fall of 46%).

About 87% (£432m) of these non-VAT frauds were reported by business in the financial services sector, with all other sectors of the economy accounting for only 13% of reported (non-VAT) frauds. This means that organisations employing well over 80% of the UK workforce are only reporting 13% of fraud by value.

Simon Bevan, the report’s author and national head of BDO Stoy Hayward’s Fraud Services team, says: "Fraud is actually spreading like the flu. Until you are hit by it you don’t always know how bad it can be. Less fraud is going through the courts and many fraudsters may be feeling invisible. That is certainly not the case. More people should be taking anti-fraud measures, such as fully checking references of new recruits, to prevent full blown problems before they detect the symptoms.

"With an economic downturn now already affecting the property and financial services sectors, I expect to see many more frauds being discovered in 2008."