UK fraud cases soar to £1bn

Levels of reported fraud in the UK have reached a 10-year high after cases worth almost £1bn (€1.5bn) reached the courts, a report said today.

Auditors KPMG said there were 222 domestic fraud cases involving losses of more than £100,000 (€146,000), compared with 174 in 2004. That took the overall value to £942m (€1.4bn) in 2005 – almost triple the figure of £329m (€480m) in 2004.

Fraud in the capital and the South East amounted to £673m (€983m) , while the Government was the worst-hit business with £447m (€653m) in missing funds, mainly caused by tax evasion, VAT and benefits fraud.

But the most dramatic rise came in card, identity and chequebook crime, with financial institutions losing £360m (€526m) against £37m (€54m) in 2004.

KPMG forensic partner Jeremy Outen said: “There has been a worrying boom in fraud in recent months, although the good news is that we know this because the fraudsters are being successfully brought to book.

“Criminal gangs appear to be very active with aggressive stings, while in the private sphere internal frauds to fund excessive lifestyles or to pay off burgeoning debts shows no sign of abating.

“With both the number and the average value of frauds increasing, companies and individuals need to be more watchful than ever.”

Just under half of the total debt was siphoned off by professional gangs, KPMG said.

Most was as a result of “insider” fraud by management or company employees - accounting for £468m (€684m), with management-level staff the most likely culprits.

The firm’s Fraud Barometer, which been analysing cash crime since 1990, noted that the last time fraud was higher was in 1995 when it reached £1.2bn (€1.7bn).

Last year, the North saw the least fraud committed in the UK – it lost £7.7m (€11.2m) – and fraud fell in north-west England from £43m (€62.8m) to £21m (€31m) and in Scotland from £29m (€42.3m) to £18m (€26.3m).