With fraud costing the British economy nearly £1 billion a year and insider fraud by employees accounting for over half of all fraud coming to court in the first half of 2006, a confidential new whistleblowing hotline service has been launched to help UK companies tackle the problem..
KPMG Forensic's Ethics Line service is an independent 24-hour whistleblowing hotline which enables employees to raise genuine concerns about possible fraudulent or improper conduct in confidence, allowing their organisation to take prompt and effective action.
The service has been operated by KPMG in other jurisdictions for a number of years but has not hitherto been available to UK companies.
Fraud in the UK has tripled in the past three years with many experts believing that most goes unreported
And as research by accountancy firm BDO Stoy Hayward found earlier this year, reported fraud rose 30 per cent in 2005 compared with 2004 while employee fraud has risen by a staggering 200 per cent since 2003..
Meanwhile, KPMG's Fraud Barometer has found that insider fraud committed by management or staff accounted for over half (£330m out of £650m) of all fraud coming to court in the first half of 2006 alone.
David Luijerink, director at KPMG Forensic, said: "Colleagues sometimes suspect that fraudulent activity is going on but are reluctant to report or 'blow the whistle' due to lack of confidence in internal reporting systems, or fear of victimisation or retribution.
"Employers should do all they can to remove these obstacles, and a whistleblowing hotline is one element of the solution. Statistics suggest that up to 50 percent of frauds are discovered following an employee blowing the whistle."
The hotline not only helps avoid employees turning a blind eye to suspicions of unlawful activity, but it also reduces the risk of them going outside the organisation with their concerns, potentially causing unnecessary financial and reputational damage, Luijerink added.
The BDO Stoy Hayward survey found that while most employees would want to report dishonest colleagues, many said they would probably be deterred because they did not know the correct procedure to follow or because of fear of recrimination.
More than a third feared losing their job, being cold-shouldered by colleagues or in some way having their career prospects harmed, and less than none in 10 expected any reward, recognition or promotion.