Ethical Performance
inside intelligence for responsible business


Low-tech fraud makes unwelcome return

February 2014

KPMG’s bi-annual Fraud Barometer has shown that while fraudsters are at the cutting edge of technology - attacking banks in the virtual world for example - some have reverted to ‘paper and pen’ as organisations focus efforts on technology-driven defences.

Hitesh Patel, UK Forensic Partner at KPMG, commented: “It is certainly the case that we have seen fraudsters using very clever high tech frauds to attack banks, businesses and local authorities, but we have also seen some of the biggest frauds in more low tech scams.

“As old forms of transactions, such as cheques, are phased out, organisations are focussing on developing sophisticated lines of defence. Yet, rather than putting criminals off, many fraudsters are ignoring the challenge of triumphing over technology in favour of using simpler methods of deception.”

The data shows that con artists still rely on ‘old technology’ to perpetrate fraud, with a number of schemes in 2013 based on counterfeit cheques.

Fraudsters’ determination to focus on the so-called old-fashioned scams and avoid elaborate methods of deception is also evident through a resurgence of cases involving tax rebates, loans and mis-selling. Combined, the three forms of fraud totalled more than £343m – up from £41m in the previous 12 months.

Despite organisations seeing a decline in internal cases of fraud, the latest Fraud Barometer highlights the first prosecutions under the UK’s Anti Bribery and Corruption legislation. Patel adds: “The pressure to compete lies at the heart of attempts to bribe and corrupt and the old adage of every person having their price is now much more likely to trigger criminal repercussions.

“The UK has seen its first corporate prosecution under the new anti-bribery legislation, and with it widely known that other cases are in development, fraudsters may begin to fear the ramifications of being caught. If guilty verdicts are returned and heavy punitive measures imposed, perhaps we will start to see people thinking twice before attempting to corrupt others in the pursuit of unfair advantage. ”??

The report also shows that while??a high volume of fraud cases have been prosecuted in the past year, they were at a much lower value levels than recorded in previous years – the average case value this year being £2.9m, compared to £6.1m, over the last five years.  

KPMG | UK & NI Ireland | Corruption


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