THE number of fraud cases progressing through British Courts has rocketed by 25% in the past 12 months, while the monetary value has fallen by 14% to £717m, according to KPMG’s latest Fraud Barometer.
Fake investment opportunities and rogue traders topped the list of shame, while financial institutions and government bodies were deemed most likely to fall victim to fraudsters. Researchers noted a definitive uptick in payroll fraud – leaping from £1.2m in 2013 to £6.3m last year.
In one example, an individual invented fake companies and imaginary staff in order to transfer £3m into 20 bank accounts, to fund a gambling addiction and to send money to his fiancée in Thailand. He was rumbled by a colleague, but rather than report the crimes, he demanded a £1.1m slice of the illicit booty to keep quiet.
Hitesh Patel, UK Forensic Partner at KPMG, said: “The popular perception is that anyone discovering fraud would do the right thing and report it, but there is a risk that temptation might lead some people to adopt the mentality of ‘if you can’t beat ‘em, join ‘em’. Collusion makes the problem of spotting and stopping fraud that much harder. Having a strong ethical culture inside an organisation is a critical defence to combating white collar crime.”
Fraudsters were found to be increasingly targeting the vulnerable, duping people into buying stolen, counterfeit or non-existent goods, investing in non-existent assets and charging for unnecessary household repairs.
A number of schemes highlighted in the analysis show that victims are tempted by the prospect of building their income streams, with ‘investment fraud’ cases worth a total of £216m, making investors the largest victims of fraud in 2014. A year ago, with net pay still suffering, the same fraud cases accounted for £168m.
Analysis showed that the number of cases where companies fell victim to a scam rose from 64 to 107, with the value of frauds totalling £98m to £76m in 2013.
Patel concludes: “Fraudsters are making hay from the corporate and investor communities who are dropping their guard as we see an upturn in economic fortunes. But business and investors don’t have to play ‘the victim’. Instead, by improving governance and by remaining vigilant it is much easier to fight fraudsters, as prevention is better than court.”
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