Midlands fraud cases hit £37m in last six months

The value of alleged fraud cases seen in Midlands courts reached £37m in the first half of 2018, more than ten-fold compared to the same period in 2017, according to latest research by KPMG Forensic.

The number of cases passing through courts in the region almost tripled, with a significant jump to 38 in 2018, up from 13 in the first half of 2017, and average case value has risen from £214,000 to £996,000.

Cases to reach the region’s crown courts during this period include a builder from Leicester who was found guilty of conning people out of their life savings, to the tune of over £100,000, by leaving work on their homes incomplete, which then had to be rectified by professionals.

The Midlands has seen a clear shift in the types of alleged fraud committed in 2018, as fraud against investors and commercial businesses declined, whilst alleged fraud against financial institutions rose. In the first half of 2018, professional criminals and people in management positions were responsible for the majority of cases, and the region also saw a rise in the number of cases committed by people over 55.

Julie Bruce, forensic director at KPMG in the Midlands, said: “Our region is well known for its financial services sector, and it’s a concern to see the value of cases against our banks, building societies and investment community increase so dramatically. The significant rise in value in the first half of 2018 is largely due to two individual cases of mortgage fraud committed by criminal gangs – in both cases, made up of family members. By keeping the operation within the family network, perpetrators may feel a better sense of control and trust, and whilst banks and lenders usually have good protocols in place to detect unusual activity, it’s clear that fraudsters are also finding ways to dupe them out of greater amounts of cash.

“In recent months, there has also been a significant increase in financial institutions falling prey to cyber-attacks, and this will no doubt see individuals and businesses in the Midlands seeking reassurance that their systems and online bank accounts are safe.

“What’s interesting, is that our research also highlighted that, by age group, the highest value of fraud cases in the region were committed by individuals over 55, at £17 million. When you normally think of fraud and middle aged individuals, more often than not, the assumption is that they are the victims. However, with rising inflation pressures squeezing the purse strings, those who are usually considered as the household providers could be resorting to desperate, criminal methods to raise funds.

“All of this combined continues to highlight the importance of fraud prevention and should prompt management teams to remain vigilant and keep alert to the risk of fraud. So, having robust prevention and detection mechanisms is a must, and this is particularly important at a time when public trust and challenging economic times are at the forefront of people’s minds.”