Fraud total down but computer crime is the new battleground

Ben Southwood
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FRAUD dropped massively in the first half of this year but worryingly is mainly perpetrated by management, says research released today by KPMG.

Fraud figures fell from £1.1bn during the six months to June 2011 to just £374m in the same period this year – the lowest since the second half of 2006. Though this came from an increased number of prosecuted cases, up from 131 last year to 136, there were a smaller number of major cases.

Most cases tend to come from within organisations, according to the study, with 55 per cent of the total perpetrated by management. Employees, on the other hand accounted for under six per cent.

One key difference this year has been the absence of so-called “missing trader” VAT fraud after a government campaign – no crimes of this type were prosecuted in the first half of 2012.

KPMG fears that streamlining operations in a tough economic environment may lead to less oversight of managers, giving them more leeway to engage in fraudulent activity. But this oversight may not always give the results intended – one notable case is that of the counter-fraud head at a bank who pocketed £2.4m in procurement scams.

Cyber-crime has emerged as a new battleground in fraud – one case involved the sale of over 340,000 individuals’ details, and losses to businesses of some £27m.