Britain loses £717m to fraud in 2014
The number of fraud cases going through the British courts has increased, but the value involved in frauds has fallen.
The figures come from KPMG's latest Fraud Barometer, which found that fraud cases heard in 2014 involved a total of £717m, representing a fall of 14 per cent compared with the previous year. The number of cases heard rose by 25 per cent, however.
KPMG's fraud experts say that the increase in lower value cases reflects the trend for con artists to target victims on the grounds of vulnerability rather than wealth, with many of the latest cases revolving around cowboy trading and fake investment opportunities.
The firm found 14 incidents, worth a total of £5.7m, involved professional criminals duping consumers into buying stolen, counterfeit or non-existent goods, investing in non-existent assets and charging for unnecessary household repairs.
In one case, twin brothers defrauded more than 70 people out of £1.6m. Their victims lost up to £110,000 each, after they were persuaded to invest in properties in Bulgaria and Cape Verde, when the money was in fact used to repay the fraudsters' business and personal bank overdrafts as well as on shopping sprees.
Hitesh Patel, UK forensic partner at KPMG, commented: "Preying on people's fears, or worse, creating fear where it doesn't exist, is a tactic that con men adopt when times are tough. Pensioners in particular are seen by fraudsters as easier targets than others. Increased freedoms around pension investments mean they suddenly have their life savings available to them, but often are unclear where best to keep them safe.
"The key to beating fraudsters at their own game is to use support networks to check whether something is really as good an opportunity as it seems." The value of large fraud cases in Scotland rose from £6.8m to £8.6m last year, representing an increase of around 26 per cent, but the number has decreased from 15 to 13.
Fraud cases involving financial institutions made up the majority of cases, increasing from £2m in 2013 to more than £6.7m in 2014.
However, while in 2013 more than one third of cases that were coming to Scottish courts involved fraud by employees, the latest figures show that three-quarters of total losses suffered were to con artist customers, mostly through mortgage fraud.
Ken Milliken, KPMG head of forensic, Scotland (pictured, left), said: "Individuals who gave false information to acquire mortgages are now paying the price as banks and then police look to crack down on mortgage fraud. The numbers do not mean that mortgage fraud is on the increase but rather that investigation and enforcement activity is on the increase."
He added: "Because there will always be people willing to break the law for their own ends, the fight against fraud will never be won."