Fraudsters ensnare the poor and the vulnerable | KPMG | UK

Fraudsters ensnare the poor and the vulnerable to enrich themselves

Fraudsters ensnare the poor and the vulnerable

Fraudsters are once again targeting some of society’s most vulnerable, preying on those in financial distress to enrich themselves.


Partner, Forensic

KPMG in the UK


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Broken piggy bank

KPMG’s Fraud Barometer saw a marked increase in fraudsters targeting individuals and families, particularly those in financial distress, stealing £156m. This reflects a 300% increase on 2014 when just £38.5m was lost by vulnerable victims.

In one such case criminals preyed on victims struggling to pay their mortgage, offering to buy their homes and lease them back to the individuals, enabling them to stay in their properties. In collusion with a crooked surveyor, the properties were re-mortgaged for an inflated value in the names of unsuspecting nominees, and the loans were then defaulted upon. Whilst financial institutions were subject to losses of £111m, the human cost was also significant as many of those taken in by the scam lost the homes they thought they had saved.

In another case the perpetrator ran two companies offering debt restructuring and advice services to help people manage and reduce their debts.  However the fraudster diverted the payment received from victims into a personal bank account, leaving both the firm’s customers and creditors out of pocket to the tune of £900,000. 

Hitesh Patel, Forensic Partner at KPMG in the UK, said: “Criminals hiding behind a veil of respectability are preying on the poor, pushing people further into poverty.  After appearing to offer victims a way to escape their debt, they have then proceeded to take what little the victims had left.  With interest rate rises possible in 2016, such debt restructuring schemes are, sadly, likely to remain popular with fraudsters.  People struggling with their rising living costs and who are naturally looking for help will be especially vulnerable to falling into the webs woven by such fraudsters.”

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