Money laundering surges as overall fraud levels decline
Money laundering was the largest type of fraud and economic crime by value in 2024, with the average value of individual cases jumping 10-fold versus the previous year, according to BDO’s latest FraudTrack survey of reported fraud.
BDO’s research found that money laundering cases totalled £337m last year, representing 61% of the total 2024 reported value of fraud and economic crime, while the average value of these cases was £19.84m, a 10-fold rise on the £1.96m average value recorded in the previous year.
Overall, the value of reported fraud and economic crime in the UK fell to £550m last year, down from £2.3bn in 2023 amid a 63% drop in high-value fraud cases. However, the overall number of fraud cases over the last five years has remained steady.
The fall in fraud values broadly follows the five-year downward trend in reported fraud, despite a spike in 2021 when reported losses jumped to more than £10bn during the period affected by the Covid pandemic.
While money laundering represented the highest number of frauds by value, ‘non-corporate fraud’ such as phishing scams and identity theft were the most common fraud type by number, representing 41% of fraud cases reported in 2024. This is the second highest count of non-corporate frauds recorded since 2019.
Looking across different industry sectors, the retail trade was most vulnerable to fraud, accounting for almost half (49%) of fraud by value in 2024. This was followed by fraud affecting the public sector.
By region, London and the South East accounted for more than three quarters (79%) of total reported fraud value. This was followed by the North West (5%) and the Midlands (4%).
Commenting on the latest report, Stephen Peters, BDO partner and head of investigations said: “Statistics can only ever provide a partial picture of the scale of the problem given that it is widely accepted that fraud remains vastly under reported across the broader economy.
“There are some signs of optimism in our data – notably the decline in overall reported fraud values. However, the high prevalence of money laundering is particularly troubling. Indeed, the National Crime Agency’s latest strategic assessment suggests that over £100bn could be being laundered through the UK each year. Fraud trends are certainly something businesses should pay close attention to given that, from September this year, the Economic Crime and Corporate Transparency Act introduces a new corporate criminal offence for failing to prevent fraud.
“While some organisations have taken proactive steps to enhance their fraud risk management strategies, others are still underprepared and will need to take urgent action to ensure they are compliant.”
The report also highlighted the growing threats posed by the rapid development of AI technology, such as voice cloning, and the prevalence of ‘fraud farms’ linked to organised crime which use fraud-enabling technology to launch mass attacks on individuals via email and social media.
Peters added: “Fraudsters are embracing AI technology at pace to increase the scale and success of their schemes. While this is posing new and dangerous threats, technology is also proving to be a vital tool in the armoury of the anti-fraud community to help identify and disrupt fraud attempts at source.”