Fraud in construction - how to deal with it

How Fraud Is Tearing the Construction Industry Apart 

19 August 2022

As if the industry didn’t have enough to contend with, a new survey has revealed that 1 in 4 UK construction companies have been defrauded over the past year. 

The last couple of years have been a struggle for everyone but it’s been a particularly troublesome period for the construction sector. Labour and material shortages, coupled with rising costs for just about everything under the sun, have meant that many companies across the country have either had to delay their projects or are being forced to close down completely. 

On top of that, a study conducted by the University of Portsmouth last year, as well as a Herts Tools survey in May 2022, has concluded that the construction industry has a corruption problem on a scale that outstrips many other sectors. 

What are the main types of fraud to look out for? 

With a quarter of construction companies suffering from fraud in the last year, the data highlights that three in five businesses have found the quality of materials unlawfully reduced.  

A third of firms have also fallen victim to invoice fraud, which is especially harmful at a time when rising costs are eating into profit margins everywhere. 

Further highlighting the scale and range of construction fraud, one in every five companies have been affected by falsified expense reimbursements, false billing, contractors lying about qualifications, purchase fraud or stealing tools for other projects.  

One in five have also encountered bid-rigging, bribery or another form of corruption

How can you recognise the signs of fraud? 

While fraudulent activities may be particularly hard to spot in the daily hustle and bustle of a construction site, there are some things you can do to prevent your business from being affected. 

  • Scrutinise any last-minute changes to invoices or materials 
  • Examine the details of expensive purchases 
  • Supervise workers to make sure they have the skills and health & safety knowledge required 
  • Watch out for unusual working practices, such as someone taking on duty they wouldn’t normally perform 
  • Ask your accountant to inspect your accounts 
  • Beware of resistance to anti-fraud measures 

What does this mean for you? 

Going through every minute detail for every invoice you’ve got coming in will have you going blind by 40. 

However, relying on services like PAL Hire will take a big chunk of that stress off. With PAL Hire, you have a partner by your side that enables you to access the UK’s largest network of equipment hire depots – meaning that every item of hired equipment you might need to operate can be managed for you. 

One call to PAL Hire unlocks the ability to focus on a project, as we look after every aspect of the hire. From booking to checking ETA’s (to triple check equipment arrives when you need it) and arranging collection when the hired-in equipment is no longer needed, you can rely on us to sort it out.  

Looking for a hassle-free project that doesn’t have you tearing hairs out of your head? Call our head office for a quote on 0161 482 6200 – PAL Hire Equipment Hire Done Differently.