What has happened?
In February 2022, KPMG’s latest published biannual UK Fraud Barometer disclosed that cases of fraud by employees rose last year, potentially due to Covid-19.
How has it happened?
The 2021 Fraud Barometer considers major fraud cases reported in the media and heard in the UK’s Crown Courts, where charges are in excess of £100,000.
The Fraud Barometer found that 298 alleged fraud cases meeting this threshold were heard during 2021 (up from 180 in 2020). The number of frauds in this category committed by employees rose from 44 in 2020 to 66 in 2021. At the management level, the figure rose from 21 to 66 cases. For KPMG UK, this trend is potentially linked to weaknesses in internal controls driven by the impact of Covid-19, while businesses were implementing new ways of remote working.
KPMG shows the categorisation of cases by perpetrator as follows;
A majority of fraud cases are cyber-enabled, and according to figures from the National Fraud Intelligence Bureau, 80% of reported fraud is cyber-enabled. Reflecting this, the Fraud Barometer data reveals that fraud relating to cyberattacks or the trading of stolen data rose significantly, from one case worth £9.2m in 2020 to five cases worth £22.6m in 2021. The data also exposed a significant increase in the number of cases heard in UK courts relating to account takeover and payment transfer fraud. This type of fraud increased from eight cases in 2020 to 31 in 2021 and the value of this type of fraud also grew from £8.3m in 2020 to £46.8m last year.
This number contrasts with figures from Action Fraud. There were 875,622 reports made to Action Fraud between 2020 and 2021, with a reported loss value of £2.35bn. According to KPMG UK, there were no high-value fraud cases over £50m last year and instead, lower value crimes increased in both value and prevalence. Fraud cases worth between £100,000 and £5m reached a total of 285 cases in 2021, with a value of £178m; this compares with 164 cases in 2020 with a value of £100.3m.
Perpetrators of fraud continued to take advantage of the general public. In 2021, 93 cases of fraud were committed against a member of the public, which reached a total value of just under £116m, compared with 39 in 2020 totalling £33.3m.
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