Case Studies

Fraud barometer

by Mark Rowe

Professional criminals have seized on the opportunities created by the covid pandemic to target victims in their own homes, suggests an audit firm. KPMG’s regular ‘Barometer’ of fraud, which tallies cases – not including online fraud – with a value of over £100,000, saw the total value of alleged fraud reaching UK courts in the first half of 2021 fall significantly (70 per cent) year on year, standing at £139.1m.

Comment

Roy Waligora, Partner and Head of UK Investigations at KPMG, said: “Despite the courts struggling with the impact of lockdown and COVID-19 restrictions, attempts to break through the backlog of fraud cases in the system are progressing. The legal system, like much of the world, has adapted quickly to adopt technology to help alleviate the huge numbers of cases that were put on hold last year when the pandemic first hit. To give a feel for the previous levels we have seen, the first half of 2019 saw fraud values of over £319 million and in the same time in 2018 we saw over £895 million.

“Whilst the number of alleged fraud cases reaching court is significantly up on last year, no super-cases have been recorded in the data, which may point to more complex cases being delayed.

“From phishing and text scams to posing as banks to get unsuspecting customers to allow their accounts to be taken over – having a captive audience at home during lockdown has provided the perfect opportunity for unscrupulous criminals to take advantage.

“During the pandemic there were a number of consumer campaigns to raise awareness of scams that were doing the rounds, but professional gangs are adept at moving on to the next big scam quickly. Keeping consumers alert and educated on the new types of scams coming through remain crucial in the fight against organised criminals.”

As for the future of business, with hybrid working, leaders will need to ensure more robust internal controls are in place, including the degree of oversight they have on key areas of their business, such as finance or procurement, he suggested.

“The relationship between employers and employees will see trust take a more central role, supported by strong risk controls,” he said. He pointed also to the recent UK Government BEIS consultation, and UK SOx [Sarbanes-Oxley framework] legislation that places potential sanctions on directors and/or auditors in relation to preventing and detecting fraud. “Now is the time to think about fraud risk management frameworks and whether these can withstand heightened focus and scrutiny.”

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