Lockdowns reduce number of 2020 fraud cases reaching court

Damien Margetson

The number of alleged fraud crimes heard in courts across the North West decreased by 36% in 2020, according to KPMG’s annual Fraud Barometer.

COVID-19’s impact on the efficiency of court proceedings meant that just 25 cases of fraud were heard across the region over the year, compared with 39 in 2019.

The Fraud Barometer, which records fraud cases of more than £100,000 reaching UK courts, also found the total value of fraud cases in the North West had decreased by 75% year-on-year. The total value of cases was £14.9m in 2020, down from £59m in the previous 12 months.

Damien Margetson, head of forensic at KPMG in the North West: “While on the face of it decreases in the volume and value of fraud cases appears to be good news, it’s also reflective of the levels of disruption the North West’s court system has come under.

“It is important for individuals and organisations to remain vigilant in their fight against fraud.

“Our experience suggests that the current economic climate only encourages fraudsters to target the vulnerable, and we expect the number of cases of reported fraud to rise during 2021.”

Case studies to reach the North West’s courts during this period include:

  • Bury: A man who tricked thousands of people into believing they could reduce their council tax banding in a £1m scam.
  • Cheshire: A benefits cheat who faked disability to claim more than £1m.
  • Liverpool: A council worker jailed after stealing £260,000 meant for the local authority’s care homes.

Nationally, 2020 saw a record fall in the value and volume of alleged fraud cases heard in UK courts.

There was a 51% drop in the volume of cases heard in 2020 – a total of 180, compared with 369 in 2019.

The COVID-19 pandemic saw the value of alleged fraud cases reach £723.9m, down from £1.1bn in 2019.

One film piracy case, which if successful would have cost the industry an estimated £200m, nearly doubled the value of fraud committed up to July 2020. By excluding this outlier, the data for the whole of 2020 demonstrates a significant decrease in the value of fraud cases compared with last year.

Roy Waligora, head of UK investigations at KPMG said: “As we reflect on the 2020 fraud data, the brewing backlog of untried cases continuing to build up like water behind a dam cannot be ignored. Businesses and the general public must be cognisant of the fact that the drop in both the value and volume of fraud cases is not reflective of a downturn in economic crime, but rather fallout following the COVID-19 lockdown restrictions on the courts.

“We know that disruption and uncertainty make for inviting economic components for fraudsters.

“COVID-19, coupled with Brexit, which tipped the scales towards the end of 2020, means that 2021 will remain at high risk for fraud and economic crime.

“While a tsunami of fraud is still expected to hit the courts in 2021, it is evident that progressive measures, such as virtual courts, being put in place to manage the upcoming cases will likely ease the backlog.”