Mortgage fraud plummeted last year, says KPMG

10 January 2011 | By Natalie Thomas

It says mortgage fraud, which was rife in the first half of 2010, plummeted from July to December, dropping from 21 to 13 cases, down from £96m to £12.4m.

KPMG says this suggests the bigger, more organised mortgage fraud is being tackled head on by the financial institutions.

Overall in 2010, the UK fell victim to more fraud cases than ever before, with the government bearing the brunt of the attack - the KPMG Fraud Barometer says.

Some 42% of all cases were levelled at the public purse, totalling £571m.

This was an increase of nearly 20%, from 59 instances in 2009 to 70 in 2010. 
One of the largest cases was worth £103m, in which a 48-year-old man claimed a flood of fraudulent bids for tax breaks on research into green technologies.

The volume of UK fraud cases snowballed in 2010, with 314 incidents reported - total value of £1.374bn, the highest level ever recorded in the 23-year history of KPMG’s Fraud Barometer. This was up 16% on the previous year.

Management remained unchecked during 2010, as fraud increased in this group by 20% year-on-year, to £419m. Being in a position of trust and authority enabled management to cause greater financial damage than employees  - i.e. 61 cases totalling £419m in 2010 compared with 79 cases totalling £129m respectively.

The biggest case over the last 12 months was worth £200m - in which a director of a City firm transferred large sums of taxpayer money out of the country.

He then went on to set up a currency exchange business to help more than 100 criminal clients clean up the proceeds of their fraud.

However, professional criminals remain the biggest threat to the UK, being largest group of perpetrators of fraud, recording a total of £709m in 2010 - 51% compared to £718m in 2009.

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