Wedneday 15th January, 2014

KPMG’s bi-annual Fraud Barometer has shown a high volume of fraud cases prosecuted in the past year, but at much lower value levels than recorded in previous years – the average case value this year being £2.9m, compared to £6.1m, over the last five years.

The report also shows that while fraudsters are at the cutting edge of technology - attacking banks in the virtual world for example - some have reverted to ‘paper and pen’ as organisations focus efforts on technology-driven defences.

The data shows that con artists still rely on ‘old technology’ to perpetrate fraud, with a number of schemes in 2013 based on counterfeit cheques. In one strikingly simple case a local government employee processed cheques for legitimate payees, using disappearing ink. She secured the signatures of senior management for cheques reaching a total value of £162,000 and waited for the ‘payee’ details to disappear before substituting them with her own name.  

Fraudsters’ determination to focus on the so-called old-fashioned scams and avoid elaborate methods of deception is also evident through a resurgence of cases involving tax rebates, loans and misselling. Combined, the three forms of fraud totalled more than £343 million – up from £41 million in the previous 12 months

Meanwhile the report shows there were cases where banks and businesses were attacked online, with fraudsters using computers, turning to robotics and malware in an attempt to avoid detection. One example involved eight people, arrested in connection with a £1.3 million theft by a gang who took control of a bank’s branch computer system, view APN news item of a similar incident.

Hitesh Patel, UK Forensic Partner at KPMG, says: "It is certainly the case that we have seen fraudsters using very clever high tech frauds to attack banks, businesses and local authorities, but we have also seen some of the biggest frauds in more low tech scams."

He added: "As old forms of transactions, such as cheques, are phased out, organisations are focussing on developing sophisticated lines of defence. Yet, rather than putting criminals off, many fraudsters are ignoring the challenge of triumphing over technology in favour of using simpler methods of deception."