Fraud skyrockets in 2008

KPMG Fraud Barometer claims there could be worse to come as full effect of the credit crunch hits

Fraud rocketed in 2008 according to the latest Fraud Barometer from KPMG Forensic, hitting the highest level recorded since 1995.

More than £1.1bn of fraud cases came to UK courts last year, the second highest level in the 21-year history of the survey.

Professional gangs committed £800m of fraud in 2008, but the amount of fraud committed by individuals also increased. Clubbed together, company managers, employees and customers were tried for £330m of fraud last year.

Worryingly KPMG warns the worst is yet to come, with the bulk of the fraud committed since the start of the credit crunch not even reaching the public courts.

Hitesh Patel, fraud investigation partner at KPMG Forensic, said: “These figures are bad enough in themselves, but I fear the trend for the next couple of years will be even worse. As the global economic downturn takes hold and organisations look ever more closely at their operations, it is very likely that more fraud will come to light so that the real impact of the credit crunch on fraud is yet to be fully felt.

"Already though, the signs are there - globally in the last 12 months alone at least three alleged multi-billion pound frauds have been uncovered.”

However, despite the overall increase, the government reported a fall in public sector fraud - 56 cases worth £207m in 2008 compared with 68 cases worth £833m in 2007. VAT or carousel fraud also dropped from £700m in 2007 to £115m in 2008.