Pictured above: John Kelly

As government cuts continue there is a real risk that unfit directors will escape without being disqualified.

These directors will then be free to set up businesses again and potentially lose even more of creditors' money. 

John Kelly, a partner in the Birmingham office of Begbies Traynor, said that like many government departments the Insolvency Service that undertakes the investigations on unfit directors is facing significant cuts in its budget. 

These cuts will be felt even more as last year there was a 17 per cent increase in the number of directors facing disqualification proceedings.

He cautioned: "The Insolvency Service has acknowledged that the cuts will lead to a reduction in the number of investigations it is able to pursue and therefore there are likely to be fewer disqualifications."

Traditionally, the incidence of fraud always increases during tough economic times with some notable high profile scandals during the last few years.

Those that escape the net will be very plausible and appear bona fide. Always be prepared to be sceptical and remember if something appears to be too good to be true - it probably is!

For more information about Begbies Traynor, please visit their website here: www.begbies-traynorgroup.com