Wednesday 10th July, 2013

According to KPMG’s latest ‘Fraud barometer’ fraud cases totalling over £0.5bn were recorded in the first half of 2013, up over a quarter on the previous year. They noted that one of the biggest differences this year has been in the number of professional criminals involved – now responsible for fraud totalling £290m, up from £110m in 2012. One of the key drivers for this seems to have been supply chain fraud - worth £61m (up from less than £1m in 2012).

Hitesh Patel, UK Forensic Partner at KPMG, says: “While the back end of last year saw a resurgence of traditional con artistry, this year has seen fraud cases turn a darker corner with professional criminals acting across borders for the purpose of defrauding governments and financial institutions. What has been really marked is the increase in the corruption of supply chains by fraudsters.

While procurement functions seek to do relevant due diligence checks on potential suppliers, fraudsters are increasingly getting smarter at getting around traditional procurement processes and controls. Organisations need to make the most of the numerous data sources available and overlay that with the information they have on a third party they plan to do business with. Joining up the data and information dots is a key tool in building a more informed picture to prevent risks crystallising to such an extent that it causes damage to consumers and organisations.”

Patel comments: “What is clear from this year’s report is that fraud is on the up and remains a huge cost to government and the private sector. It is a welcome development to see that the Government continues its fight against white collar crime. A very severe punishment regime is being proposed in the sentencing guidelines consultation paper issued recently to tackle the growing scourge of white collar crime and the acknowledgement that the real cost of fraud is more than just financial.”

In line with overall national crime statistics, the data shows that fraud is overwhelmingly committed by men, with 86% of frauds in 2013 committed by men, and by people over 35 (responsible for 95% of frauds in 2013).