Fraud has increased by 22% in the first half of the year to £385m, the KPMG fraud barometer has reported. The three areas where fraud had significantly increased: fraud committed within the family, criminal middle men, and people in managerial positions, or with responsibility.
Fraud committed by family members betraying the trust of elderly relatives has increased by 384%. The motivation seems to be from family members growing frustrated waiting for their inheritance. While KPMG is reporting that elderly relatives have had £1.7m stolen, this total could just be scratching the surface with a lot of cases going unreported. With the nation living longer, it is possible that as the years go by we could be seeing more fraudsters falling in this category becoming more widespread.
The volume of transactions now being done online his caused an increase in counterfeit goods being sold by 242% This form of fraud, dubbed the middle man fraud by the report, has seen criminal misrepresenting themselves or their goods to the customer, resulting in £99m in the first two quarters of 2015.
Those in the position of responsibility – white collar workers – are the source of the biggest increase of fraud, seeing crime in this area increasing from £72m last year to £262m, accounting for 68% of fraud. These fraudsters are motivated by stealing money to supplement their lavish lifestyle.
Incidentally, this week fraud specialists PKF Littlejohn published their own findings in Countering fraud for competitive advantage, indicating that UK businesses lose 5.6% of the total expenditures to fraud – £103bn. Jim Gee, co-author of the report and Head of Forensic and Counter Fraud Services at PKF Littlejohn, reports that it is not often the headline grabbing cases which are the main offender:
“Most fraud is high volume, low value and therefore difficult to detect and expensive to investigate. Companies which have successfully reduced the cost of fraud have focused on pre-empting it: creating stronger anti-fraud cultures, more effective deterrence and preventing fraud by designing weaknesses out of processes and systems. Our report shows that a real competitive advantage can be gained from taking this approach.
“This is important because fraud over recent years has increased. There are many factors contributing to the increase, including the impact of the recession on people’s incomes and increased opportunities through the rise of the cyber world. But other factors, such as reduced adherence to collective moral and ethical norms, and the increasing pace of business life unmatched by related development of controls, are also important.”