Business fraud is up by 74% on last year’s figures and has now reached unprecedented levels, new research has found.

According to a report by a major international firm, internal fraud cost UK businesses over £705 million in the last six months. In view of the findings, firms are now being urged to do more to detect fraudulent activity within their organisation.

The study also found that fraud levels were higher in the finance and insurance sectors, with employee deception costing the UK's bankers and insurers more than £636 million in the same six months.

However, a spokesperson for the company that carried out the research, warned that undetected fraud and the actions of rogue traders could push the total cost of business fraud far beyond that stated in the report.

He added: ‘The combination of spiralling personal debt and desperate employees spells real danger for business. Especially when, sadly, our figures provide clear evidence that commercial organisations of all types and size throughout the UK are currently failing, in some cases quite spectacularly, to get to grips with the fraudulent activity of their staff.’

Paying off debts (25%) and gambling (24%) have been identified as two of the main motives for committing fraud, but simple greed remains the most common motivation at 36%.