Financial crime

Digital economy a target for ‘creative fraudsters’

cash money
Cases of fraud are on the rise (pic: Terry Murden)

Fraudsters are finding new ways to steal money with the shift to digital transactions becoming an increasing target for scammers.

New research has found a sharp rise in the number and value of fraud cases, while the delays in prosecutions caused by the pandemic have added to the pressure on the courts.

Analysts at KPMG attributed rising cases of fraud on financial institutions to the “changing global banking landscape”.

Its report said that “branch networks are shrinking, volumes of digital payments are increasing and payments are being processed in seconds”. This resulted in fraudsters “creatively finding new ways to steal more from financial institutions and their customers”.

Embezzlement and money laundering have both risen, as KPMG said the figures demonstrated that “the eruption of fraud sweeping the UK is showing no sign of slowing”.

The total value of alleged fraud, exceeding £100k, reaching the Crown Courts in H1 2022 was £532.6m, an increase of 288% compared to £137.4m in H1 2021.

Seven cases were valued between £10m and £50m, with one case valued at £266m. Professional criminals were found to be the main perpetrators of heavyweight fraud, responsible for 57 instances that were worth £378m in total.

In Scotland a total of 14 cases with a total value of £14m reached the courts in the first six months – an increase of 443% compared to the same period last year when £2.6m was defrauded.  Totals so far this year have also surpassed the full year value for 2021 which was £5.9m across 16 cases.

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The public was the group scammed most by volume, while across the UK fraud cases against financial institutions was the highest by value at £305.2m in H1 2022, a jump of 4,333% compared with the same period in 2021.

In Scotland, the most common fraud type by both volume and value was cash and equivalent instruments fraud, such as counterfeit money and debit and credit card theft, with three cases having a combined value of £9.3m. Most cases had a value of between £100k – £250k, however one case involved a Scottish man scamming £7m from a US Bitcoin broker.

Annette Barker, head of KPMG Forensic in the UK, described the increase of fraud cases as “worrying”, particularly with many cases involving rogue employees abusing their positions of trust to steal money from their employers, clients and other partners.

Cases reaching Scottish courts included:

  • Dundee businessman who set fire to his own family business in a bid to carry out a £1.75m insurance scam was jailed for 13 months.
  • The managing director of an Alloa based engineering company who siphoned £100k from the firm to feed a gambling habit was jailed for 18 months.
  • A businessman from East Dunbartonshire scammed £736k worth of goods from a large retailer by exploiting a gift card loophole. He was jailed for 33 months.


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