Fraudsters are costing recruitment businesses millions of pounds a year, said Stuart Little, commercial litigation partner at law firm Shoosmiths.

The most common type of fraud is among temporary workers, who falsify time sheets, inflating the number of hours worked. He told Recruiter: "Agencies pay workers weekly and it's only later when they come to collect from the client that discrepancies are unearthed."

There are more sophisticated types of fraud, where temps collude with individuals at the agency or the empoyer to charge for 'ghost' employees on projects. However, Little said: "This is less common. The most pervasive problem is opportunistic over-billing from temps."

Because each instance is relatively low value, companies may be reluctant to pursue perpetrators. "At the outset of fighting fraud, companies may find that on a case by case basis they incur costs that outweigh the current level of fraud," said Little.

However, he pointed out: "The population of temps is relatively small, and once you have a reputation for zero tolerance, it is likely to deter fraudsters."