Fraud watchdog sees spike in whistle-blowing reports during pandemic

The UK’s fraud watchdog has seen a spike in whistle-blowing reports during the pandemic, new research has found, with the number climbing to 150 in 2021.

Reports to the Serious Fraud Office (SFO) jumped 17 per cent between 2020 and 2021, according to independent financial and strategic consulting firm Accuracy, as the Covid-19 fuelled economic downturn prompted a rise in cases.

The slowdown in economic activity during the country’s three lockdowns are suspected to have made it easier for fraudulent transactions to be spotted.

The SFO acted on nearly 90 per cent of the whistle-blower reports it received.

“What one employee does can have serious implications for the entire business,” Accuracy director Roberto Maluf said. “The severity of the potential charges bought forward by the SFO can have huge financial consequences, but also cause irreversible reputational damage.”

The research comes as the government tries to retrace the £4.9bn it lost to Covid-19 loan fraud during the height of the pandemic.

Former Treasury minister Lord Agnew on Thursday told MPs the government’s work to tackle the fraud a “Dad’s Army operation” and described the beginning of the pandemic as a “happy time to be a crook”.

Partner at Accuracy Morgan Heavener added: “The jump in whistleblowing reports to the SFO suggests that fraud increases during times of economic uncertainty. We have also heard anecdotal reports that employees working remotely have been less likely to report fraud to their employers, and some of those employees may have instead made reports to government authorities like the SFO.

“The internal controls at many companies changed during the pandemic, and the lack of ‘physical’ surveillance may have given some the false impression that their fraud would go undetected. “We are increasingly seeing that this is not true.”