Value of fraud surpasses £1bn for first time in five years
The total cost of fraudulent activity in the UK surpassed a billion pounds for the first time in five years, reaching £1.137bn in 2016 compared to £732m the year before.
Fraud against businesses was up sevenfold last year, with inside jobs committed by employees and management the most common method, as measured by alleged fraud cases reaching court.
“The figures include over £900m derived from just seven super cases,” according to management consultants KPMG. “The surge in super cases, from £250m last year, may be a reflection of fraud becoming a more lucrative and practical proposition for those with the right skills and technology, or those in senior commercial roles.”
A major cause for the overall increase was a surge in cyber-fraud losses of £124m, according the latest edition of KPMG’s Fraud Barometer, out Tuesday. One case alone cost an eye-watering £113m via a boiler-room scam that involved crooks cold-calling prospective marks while posing as the security department of banks and tricking victims into handing over banking details.
Crime figures for England and Wales, put together by the UK Office for National Statistics and released earlier this month, featured the inclusion of fraud and computer misuse offences for the first time.
A total of 3.6 million cases of fraud and 2 million computer misuse offences were logged.
That’s a record of crime reports, many of which won’t lead to prosecutions, by contrast to the massive cases covering multimillion-pound frauds that are the focus of KPMG’s Fraud Barometer.
Criminal structures supporting cyber-fraud exist in many forms and sizes from organisations comparable to Gus Fring’s business in Breaking Bad to street-corner operations that security experts fear are drawing youngsters and the technically unskilled into its web.
Ilia Kolochenko, chief exec of web security firm High-Tech Bridge, commented: “What is particularly alarming is the rise of small online fraud committed by teenagers and people with almost no technical skills.” ®
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