More fraud court cases in 2018 than 2014-2017 combined, says KPMG

The number of fraud cases reaching courts in the UK rose by 78% in 2018, according to research by KPMG Forensic.

KPMG’s Fraud Barometer, found that 453 cases with a total value of £1.2 billion went to court across the UK last year.

The barometer includes one supercase (a case greater than £50m), but there are a large volume of smaller value cases between £10 million and £50 million covering areas such as evasion of duty, VAT fraud, investment fraud, loans and mortgages, counterfeit goods, pensions and social benefits.

Commenting on the findings James Maycock, Forensic Partner at KPMG said: “In the round, fraud was a diversified portfolio this year. Fraud levels in the UK continue to rise as criminals look for new ways to exploit both public sector and private sector fraud opportunities.

“Sophisticated technology and social engineering have become closer to the norm for ‘professional’ criminals - for example, the number of cases of ‘account takeover’ frauds in the Fraud Barometer has more than doubled from 13 cases to 34, with diversion fraud, identity theft and push-payment fraud being the most common methods. Getting the large, often cross-border and complex frauds to court is both time-consuming and resource intensive.

“This places much more emphasis on businesses and consumers to protect themselves from a growing number of fraudsters who will take advantage given the opportunity.”

Insurance scammers drive fraud value up

The barometer identified a worrying surge in the value of insurance frauds hitting courts in the last 12 months, more than was seen in the period between 2014 and 2017 combined.

Overall, £17m of alleged insurance fraud appeared in UK courts over 19 cases in the last year, compared to 24 cases with a combined values of £11.9 million in the years 2014 – 2017.

Cash for crash, personal injury scams and faked death claims featured multiple times in the list of frauds coming to Court.

One case saw a man who masterminded a £4 million bogus insurance claim scam jailed for 9 years. The scam involved orchestrating 250 collisions with innocent drivers, mainly on mini-roundabouts, making claims against dozens of insurance companies for fabricated injuries or vehicle damage. The judge was very clear in stating that all insurance customers will pay for the fraud through higher premiums.

Maycock said: “Insurance fraud has a massive impact on many people: the victims, insurance companies and of course everyone else who is left to pick up the cost through higher insurance premiums. Despite the progress that has been made, particularly with the number of people now using in-car technology to record events in real time, fraudsters will continue to come up with new and improved ways to scam the system.

“Insurance scams are no longer the domain of claiming for a ‘lost’ camera on holiday, but like many areas of fraud have turned into a very lucrative income stream for professional criminals. The increase in professional insurance scammers coming to Court goes to show the complexity of the task that the industry is tackling. Fraudsters will move quickly to new methods and exploit any area they can, staying ahead of them is a difficult challenge.”