Region’s fraud cases drop to £18.2m in first half of year

Yorkshire and the North East has witnessed a fall in the value of fraud cases heard in the region’s courts.

According to KPMG’s latest fraud barometer, the value of fraud cases reaching court during the first half of 2019 reached £18.2m, compared to £54.4m during the same period last year. The number of cases in the first six months of the year also fell, decreasing from 31 to 25.

The fall can be attributed to a significant decrease in the value of management fraud – down from £37.7m to £9.1m – despite there only being two fewer cases than the eight heard in the same period last year.  The decrease in value is partially due to a £21m investment fraud in the first half of 2018.

Professional criminals continue to be the most likely perpetrator of fraud, accounting for a third (36%) of cases heard with a value of more than £100,000. However, management fraud has the highest case value – with six cases collectively contributing half of the total £18.2m.

Cases to reach the region’s courts during this period include:

• A practice manager in York who admitted carrying out a fraud involving more than £596,000 at the GP surgery where she worked.
• A Bradford family that narrowly escaped prison for its part in a £500,000 counterfeit clothing conspiracy that breached the trademarks of brands including the Arctic Monkeys and Motorhead.
• Harrogate-based PPI claims bosses who stole £1m of client money and treated themselves to lavish holidays, luxury cars and private schooling for their children. Both received suspended prison sentences.
• A fraudster who was jailed for three years after scamming an elderly North Yorkshire woman out of £400,000 by convincing her that her bank account was under attack.

Annette Barker, Partner and Head of Consulting in the North at KPMG, said: “A fall in the value and frequency of fraud might be welcome, but we shouldn’t become complacent. Quite simply, the fight against fraudsters is far from over. The latest stats simply show that the threats that we all face are constantly changing, and so vigilance and preparation are key.

“Businesses remain a popular target for fraudsters, with examples of VAT fraud and embezzlement serving as a reminder that internal controls are just as important as protecting from external threats. On a national level, we’ve seen the commercialisation of cyber crime establish itself, so Yorkshire businesses should prepare and brace themselves as attacks move online and become ever more digitally enabled.”

The Fraud Barometer recorded a number of cases in which the commercialisation of cyber-crime had been a factor – with criminals advertising their services on the dark web.

In one case, a cyber criminal who created a virus and launched an attack which knocked a communications company in Liberia offline, was jailed for 32 months.  He had been paid $30,000 by a rival company to cause the mass disruption – which the victim spent $600,000 repairing.

The data also recorded a 57% increase in the number of account takeover cases reaching court, in the first half of the year where digital scammers used a range of techniques including email, SMS and apps to get hold of personal data that then enabled them to take over bank and credit card accounts. I

Roy Waligora, KPMG UK Head of Investigations, said: “We are noting a worrying move from criminals simply hacking as a means to an end to being industrialised personal data brokers on the dark web.  As our digital footprints get larger, cybercriminals will continue to develop new and innovative ways to steal personal data. If we are not alive to the threats, there is a great risk that we increase our vulnerability to criminals through our inaction.”