KPMG has reported that the level of fraud cases worth more than £100,000 hitting UK courts reached a total of £1.1 billion in 2019, the sixth largest value in the history of its Fraud Barometer report.
It reported that the main targets were commercial businesses and the general public with alleged cases of insider fraud against businesses more than doubling in value compared to 2018. Alleged fraud against businesses involving traditional embezzlement against employers, manipulation accounts or abuse of position accounted for over £192 million in UK Courts in 2019, compared to £109 million in 2018.
Commenting on the report Roy Waligora, KPMG’s UK Head of Investigation said “Following a very busy year for both the fraudsters and law enforcement, it is crucial that businesses and the general public remain on high alert against fraud as uncertain times breeds opportunity.
In the current economic environment, disruption, change and uncertainty are all triggers that can lead to an increase in the risk of fraud and businesses should have heightened awareness of their fraud controls.”
Tech enabled frauds have witnessed a significant increase, as well as cross-border scams involving organised gangs placing pressure on the relevant law enforcement bodies in their ability to keep track and create prosecutable cases. Alleged fraud cased targeting the general public reached £63.8m compared to £40m in the previous year, up by just short of 60%.
Worryingly for employers 102 cases of insider fraud were recorded by the fraud barometer in 2019, with fraud by management and embezzlement showing marked increases.
Ray Waligora provides a rather sobering message, stating that “Procurement fraud is a key area that businesses need to have robust controls around. Our experience shows that third party due diligence as part of a rigorous procurement controls environment can help organisations effectively manage their risk,” he said. “Without such due diligence and basic controls such as segregation of duties, the repercussions for a business, particularly smaller businesses, can be devastating.”