Recording fraud cases of more than £100,000 hitting UK Courts, KPMG’s Fraud Barometer reports a total of £1.1 billion alleged fraud in 2019, the sixth largest value in the report’s history.
Amongst 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.
In a release accompanying the announcement, KPMG’s UK Head of Investigations Roy Waligora urged vigilance. “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.”
Employees remain the main targets for fraudsters, said Waligora.
“The general economic uncertainty will also put pressure on usually law-abiding staff to take risks they might not ever have normally taken. Consequently, many businesses face an increased ‘threat from within’ coupled with a seemingly exponential rise in external threats. Employers need to be more robust with screening for new employees and third parties. Individuals who have inside knowledge of a business will often be the ones to identify the soft spots of a company’s defences for their own advantage.”
Tech-enabled frauds have been on the increase, as have cross-border scams involving criminal gangs. Alleged fraud cases targeting the public have also risen, reaching £63.8m in 2019 compared to £40m the year previous.
Mark Thompson, UK Investigations Director at KPMG, pointed out that fraud now constitutes a third of all UK crime.
“The significance of the threat to the UK’s prosperity and the impact on victims were acknowledged by the Government in its Economic Crime Plan in July,” he said, in the press release. “This wide-ranging plan contains many welcome commitments, but they will need to be delivered on by the next government if there is to be any discernible impact on the level of fraud in the long term.”
102 cases of alleged insider fraud were recorded by the fraud barometer in 2019, with fraud by management and embezzlement on the rise.
While fraud can be highly detrimental to businesses lacking cybersecurity measures, Waligora suggested firms must be wary of a variety of vulnerability points.