Fraud Barometer: The story across the UK regions

Fraud Barometer: The story across the UK regions

Use the links below to uncover the regional Fraud Barometer stories in the UK:

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The story across the UK regions

Scotland

  • Total level of fraud committed in Scotland has fallen by 39% in the first six months of 2015 compared to the same period the previous year
  • A significant rise in the level of fraud committed by employees on their customers and employers – increasing from £940,000 in 2014 to more than £3.3million in 2015 
  • A sharp decline in cases brought to court where a customer has defrauded a business – down from four in the first six months of 2014, to zero in 2015.

Ken Milliken, Head of Forensic for KPMG in Scotland said: “While the value of fraud across the UK is on the up, the picture in Scotland tells a more positive story. Measures in place to protect businesses from external fraud from customers appear to be working with no cases of that type being heard in Scottish courts during the last six months. Furthermore, the value of fraud cases in Scotland saw a marked reduction during that period with just one case being heard over the £1million mark. However, there must be corresponding checks and balances in place to prevent employees from within businesses exploiting their own customers and employers. This is reflected by the cases coming to court in Scotland in 2015, whereby significant levels of fraud have been committed by staff in trusted positions either swindling their customers or embezzling money from the firms they work for.”  

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North East

  • Six fraud cases with a total value of £11.8 million came to the Crown Courts in the first six months of 2015, dominated by one £8 million case -  almost 50 percent increase in the value of fraud compared to the same period last year
  • A series of significant frauds have taken place by management figures exploiting their positions

Sara Smith, Senior Manager, KPMG Forensic in the North East, said: "The picture painted by the North East cases in our current Fraud Barometer is one of a series of significant frauds on their own organisation or their customers by management figures who have exploited their positions to engage in illegal activities. Businesses and investors are the biggest losers in the last half year, having been alleged to be defrauded to the tune of £11.2m before the perpetrators were caught.It’s a real warning for anyone who allows others to handle their money, to make robust checks on who they are dealing with, and for business owners to maintain controls and scrutiny over those in a position to redirect funds out of the company.”

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North West

  • North West  bucks  the national trend with the value of fraud through the courts falling by 39 percent to £10.9 million
  • The data shows businesses being hit hard by unscrupulous management  - and particularly male management exploiting their positions within their companies to engage in illegal activities
  • Fraud perpetrated by customers of businesses also doubled over the last six months.

Martin Dougall, KPMG Head of Forensic in the North, commented: “While the total number and value of fraud cases seen across the North West region has fallen over the last six months, a more in-depth look at the figures paints a picture of businesses being hit hard by unscrupulous management (and particularly male management) who have exploited their positions within their companies to engage in illegal activities. Fraud perpetrated by customers of businesses also doubled over the course of the period reviewed, all of which should act as a trigger for organisations to re-examine their risk procedures and policies, and if necessary, implement stricter controls both internally and externally.” 

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Yorkshire

  • A giant £30 million fraud case meant a leap of 174 percent in the value of major frauds being heard in the Crown Courts. 
  • The above case was said to involve websites designed to look as though they were official government sites and used to trick people into unnecessarily paying for services.
  • Plus there were a series of significant but sub-£1 million frauds, largely perpetuated by male professional criminals or management figures
  • Reflecting the national picture of family fraud there was one case of a woman defrauding her grandmother of a £140,000 inheritance from her late husband.

Vivien Hopkins, Director, KPMG Forensic in Yorkshire, said: “Overall, the picture painted by the Yorkshire cases in our current Fraud Barometer is one of a series of significant but sub £1m frauds, largely perpetrated by male professional criminals or management figures. Individuals who have put themselves in a position to benefit from the deliberate syphoning of money from their organisation, clients or victims, have done so to the tune of £600,000 on average before being caught out. It’s a real warning for anyone who allows others to handle their money, to make robust checks on who they are dealing with, and for business owners to maintain controls and scrutiny over those in a position to redirect funds out of the company.”

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Midlands

  • The value of fraud cases in the region has increased by 55 percent in the first half of 2015, compared with the same period last year
  • While the number of cases has increased by only three, from 16 to 19, the total value was £32 million, compared to just under £21 million last year
  • Cases of fraud under £1 million show no signs of decreasing, but  figures show a surge in the number of frauds against individuals, with six in the first half of 2015

Simon Albrighton, Forensic Partner at KPMG in the Midlands, said: “The significant rise in the value of fraud cases in the region is partly due to several individual cases, including one of a high value investment fraud and another of mis-selling. What’s interesting is that these cases aren’t confined to one kind of perpetrator, they include management, employees and professional criminals, proving that substantial fraud isn’t just the domain of the career fraudster. However, what’s potentially more worrying to the man on the street is the increase in cases of fraud against individuals. While we saw just one example of this in the first half of 2014, amounting to £100,000, we have seen six cases this year, totalling £2.4 million. Only a third of these crimes were committed by professional criminals, which proves the need to be vigilant whenever it comes to your finances, no matter how trustworthy someone might seem to be.” 

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South East

  • Greatest increase in value of losses is seen in London and the South East
  • Financial institutions are the biggest victims of fraud across London and the South East
  • The value of their combined losses up by 1285 percent compared with the same period last year.

Chris Wheeler, Director, KPMG Forensic, London, said: “Over half of the fraud cases reaching courts in London and the South East were committed by employees or management, proving that businesses need to be vigilant even with staff in leadership roles and positions of responsibility. Perpetrators were most likely to fall within 46-55 age bracket, which could mean that fraudsters’ daring increases with age and experience, and there were nearly three times as many male perpetrators as female. With the region experiencing an increase in total losses of £5,241,500 due to fraud, these figures should serve as a warning and prompt organisations to put robust fraud prevention systems in place if they haven’t already.” 

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South West and Wales

South West: 

  • The cost of fraud cases in the South West in the first six months of 2015 rocketed by 39 percent to £7.0 million compared with £5.1 million in the same period last year
  • The volume of fraud cases at the region’s courts remained stationary - increasing the average value of fraud in the South West from £461,000 to £640,000
  • More of those committing fraud in the South West are doing so later on in life, with 89 percent of the perpetrators aged above 46 

Wales: 

  • Value of Fraud in Wales has reduced by 38 percent during the first six months of 2015*
  • Number of cases has remained reasonably static
  • There has been an increase in cases perpetrated by management and professional criminals, in aggregate accounting for 80 percent of total cases compared to 50 percent in the same period last year 

*Last year’s figures were distorted by one large tax evasion case in the region valued at £5 million which has been discounted.   

Akhlaq Ahmed, Director, KPMG Forensic in the South West and Wales, said: “Fraudsters are clearly taking more risks in the South West, with victims being left increasingly out of pocket as a result. With people living longer and the recent high cost of living, they may have built up a considerable amount of debt that needs to be cleared, as well as having aspirations for a comfortable retirement.  We have seen a trend for people aged above 46 committing fraud in the region - those that you would not naturally suspect deceiving unwitting victims of fraud” 

“In Wales, businesses appear to be putting more policies in place to prevent fraudulent activity, with no employee fraud cases registered this year, but the switch to more management fraud suggests that those in senior roles are taking advantage of the access and freedom their positions allow them to fund extravagant lifestyles and/or feed gambling addictions. Professional criminals are still at large, suggesting that no one is safe from the threat of fraud.”

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Fraud Barometer August 2015

Fraud Barometer August 2015

The latest fraud trends and patterns affecting the UK economy in the first half of 2015.

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