Major frauds push cost of crime up 50%

THE value of commercial fraud in the region rocketed last year to £43.6m.

The 50% increase in value on thr 2014 total is reported in KPMG’s Fraud Barometer, which measures fraud cases with losses of £100,000 or more reaching the UK courts.

Despite a fall in the number of cases, higher value frauds pushed the total up. Fraud against commercial businesses rose 56% during the year from £5.6m to £8.8m, while government organisations were victim to a 49% rise in fraud value to £23.8m.

People in management positions were responsible for the most cases in the region, with their share of fraud increasing by 80% over the past 12 months.

Graham Cochran, forensic director at KPMG said: “Our research highlights the significant increase in the frauds perpetrated by people in management positions and organisations should remain vigilant and not rule out the risk of fraud being performed by senior trusted members of the team.”

Notable cases coming to court in the North West during the second half of 2015, included a Handforth-based director of two debt management firms who was jailed for taking more than £1m from vulnerable clients.  The 41-year-old man, who targeted those that could not pay off their debts, admitted to two charges of fraud by false representation at Chester Crown Court.

Another major case saw Susan Rennie, a 51-year-old IT worker from Lancashire jailed after she made more than £580,000 in fraudulent transactions while working as a purchase ledger supervisor at medical IT company Ascribe.

Also a flight attendant was caught leading a smuggling operation while working for a major budget airline. HMRC found that the 44-year-old woman had organised over 130 smuggling trips for herself and five others to smuggle cigarettes and alcohol to evade £180,000 of duty and taxes.

Nationally, the value of fraud reached more than £732m in 2015, a £15m increase on the previous year, according to new analysis by KPMG.

The average value of fraud per case also increased to £2.4m in 2015 compared to £2m in 2014.  A key driver for this rise being two cases which accounted for £253m of the total fraud recorded in 2015.

Sarah Hill, partner and head of fraud at Manchester-based BLM, said: “This report has highlighted the depth and scale of the insurance fraud problem, with effects experienced by both business and households across the UK.

“With billions being lost on an annual basis, insurers are already spending large sums on dealing with the problems caused by fraud, but loopholes in legislation continue to hamper their efforts.”