South east '˜hit hard' by fraudsters

Financial institutions across London and the south east were hit hard by fraudsters over the last 12 months with over £157 million being defrauded by criminals, an increase of 779 per cent on last year.

The lifeboat from Selsey positioning itself alongside the Eridan
The lifeboat from Selsey positioning itself alongside the Eridan

KPMG’s Fraud Barometer, which measures fraud cases with losses of £100,000 or more reaching the UK courts, shows that overall the total value of fraud prosecuted in the region in 2015 fell by 21 per cent to over £380 million but still accounted for over half of all fraud taking place in the UK.

There was a marked increase in the value of frauds being committed by managers and employees which was up by 153% on 2014 figures. In one case a mother of two from Surrey stole £1.75 million from the family business that she worked for as bookkeeper. Unbeknownst to the business when they recruited her she had previously been convicted of benefits fraud and 10 counts of fraud against a former employer.

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Commenting on the findings Chris Wheeler, head of forensic for KPMG’s South East region said: “The South East remains the UK’s fraud hotspot and financial institutions in particular have been hit hard this year.

“Fraudsters and criminal gangs see financial institutions as a series of processes that they need to overcome, but once penetrated the rewards can be bountiful.

“Whilst large organisations focus on regulatory efforts to combat financial crime at the front end, such as money laundering, the data shows vulnerability to old-fashioned back office fraud.

“The importance of employee screening and pre-employment due diligence measures cannot be understated.

“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.”

Nationally, fraud in the UK reached more than £732m in 2015. The research shows that the value of fraud prosecuted rose in 2015, up from £717m in 2014. The average value of fraud per case also increased to £2.4m in 2015 compared to £2m in 2014. A key driver for this rise being two cases which accounted for £253m of the total fraud recorded in 2015.

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