KPMG’s recently released Fraud Barometer found that the number of fraud cases reaching courts in the UK rose by 78% in 2018. The research, which records cases of alleged fraud with a value of more than £100,000 ($129,000) found that 453 cases with a total value of £1.2bn come to court across the UK last year.
The report identified a surge in the value of insurance frauds hitting courts in the last 12 months, more than was seen in the period 2014-2017 combined. Overall, £17m of alleged insurance fraud appeared in UK courts over 19 cases in the last year, compared to 24 cases with a combined value of £11.9m in the years 2014-2017. Cash for crash, personal injury scams and faked death claims featured multiple times in the list of frauds coming to court.
One case saw a man who masterminded a £4m bogus insurance claim scam jailed for nine years. The scam involved orchestrating 250 collisions with innocent drivers, mainly on mini-roundabouts, making claims against dozens of insurance companies for fabricated injuries or vehicle damage. The judge was very clear in stating that all insurance customers will pay for the fraud through higher premiums.
“Insurance fraud has a massive impact on many people: The victims, insurance companies and of course everyone else who is left to pick up the cost through higher insurance premiums. Despite the progress that has been made, particularly with the number of people now using in-car technology to record events in real time, fraudsters will continue to come up with new and improved ways to scam the system,” said KPMG forensic partner James Maycock.
“Insurance scams are no longer the domain of claiming for a ‘lost’ camera on holiday, but like many areas of fraud have turned into a very lucrative income stream for professional criminals. The increase in professional insurance scammers coming to court goes to show the complexity of the task that the industry is tackling. Fraudsters will move quickly to new methods and exploit any area they can, staying ahead of them is a difficult challenge.”
While the barometer includes one ‘super-case’, with a theft greater than £50m, there are also a large volume of smaller value cases between £10m and £50m covering areas such as evasion of duty, VAT fraud, investment fraud, loans and mortgages, counterfeit goods, pensions and social benefits.
Mr Maycock said, “Fraud levels in the UK continue to rise as criminals look for new ways to exploit both public sector and private sector fraud opportunities.
“Sophisticated technology and social engineering have become closer to the norm for ‘professional’ criminals - for example, the number of cases of ‘account takeover’ frauds in the Fraud Barometer has more than doubled from 13 cases to 34, with diversion fraud, identity theft and push-payment fraud being the most common methods.’’
He said getting cross-border and complex frauds to court is both time-consuming and resource intensive. This places much more emphasis on businesses and consumers to protect themselves from a growing number of fraudsters who will take advantage.
The report also found that of the 16 most prominent fraud cases to reach the courts, 11 were committed by employees and management of the affected company. A