Fraud at 12-year high

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Tuesday 5th February 2008

Figures from KPMG Forensic show fraud is at its highest level in 12 years - and shows no signs of slowing.

The organisation predicts that 2008 could see an even greater amount of fraud committed than the previous year as personal and business pressures mount.

Partner at KPMG Forensic Hitesh Patel explains: "Now that the economy looks set to slow, we could see more people attempting frauds to ease their financial burdens."

But there could be other reasons for an increase in reported cases, he suggests, arguing that it could be the case that some illegal activity has been missed in the past.

As economic pressures cause firms to "tighten their belts" in the coming months, Mr Patel predicts that more cases could come to the surface than has previously been the case.

The report also observes a trend towards high-value fraud, revealing that the actual number of incidents detected over the course of 2007 was slightly down on the previous year.

While the number fell from 277 to 197 - a 40 per cent drop - the combined value was in excess of £1 billion, the highest figure since 1995.

Many of the frauds detected during the past year are "creative and brazen", KPMG Forensic asserts.

These include a couple who lived in a one-bedroom flat but claimed benefits for eight adults and 46 children.

A gang earned more than £500,000 by pretending to be prospective house buyers, taking down details of the properties they viewed and then obtaining title deeds from the Land Registry.

This allowed them to remortgage the properties without ever having owned them, KPMG Forensic reveals.

Some £25.6 million of fraud was committed by customers over the year - almost as much as that carried out by employees, which totalled £27 million.

However, outside of organised crime managers were found to be most at blame with £54 million of fraud committed by company leaders. ADNFCR-8000200-ID-18454595-ADNFCR ©