Tuesday 29th July, 2014

Fraud cases totalling £317 million were recorded in the first half of 2014, according to KPMG’s latest Fraud Barometer.  The figure represents a 39 percent drop compared to the same period last year, but the number of frauds has remained constant.

However, the latest cases suggest organisations have failed to spot a ‘changing of the guard’ as the profile of fraudsters start to shift from rogue senior executives to younger individuals funding extravagant lifestyles. Analysis of the cases going through British Crown Courts since the start of 2014 shows that frauds committed by those aged 26-35 were valued at just over £62 million - a 285% increase over the same period last year. Whilst frauds committed by those aged 46 and over fell by 72 percent to £88 million.

Hitesh Patel, UK Forensic Partner at KPMG, says: "It is important for UK organisations to recognise that youth doesn’t always equal innocence, as a confident and tech savvy generation comes through, adept at circumnavigating conventional controls and staying under the radar."

The latest data shows, for example, that the increase in volume in the £1-10 million bracket was driven by a significant increase in insider fraud, with the number of employee-perpetrated frauds in this value range increasing more than ten-fold.

One case revolved around a 24 year old bank clerk who attached a device to a computer within the branch he worked at. The device allowed fictional deposits worth £1.1 million to be made into 15 customer accounts, which were then withdrawn by the customers and a colleague – all of whom had been colluding with the ring-leader.

Hitesh Patel added: "Complacency and ’it won’t happen to me’ syndrome should not be allowed to creep in to peoples’ mindset as the battle to combat white collar crime goes on."