Fraudulent schemes targeting UK investors show rise – KPMG Fraud Barometer

Maria Nikolova

Scotland saw investor fraud triple, leading to losses of £19 million, whereas the value of fraud against financial institutions in Yorkshire has more than trebled in 2016, KPMG research shows.

The value of alleged fraud reaching UK Courts passed the £1 billion mark in 2016, according to the latest KPMG Fraud Barometer. The UK suffered approximately £1.14 billion of fraud losses in 2016, up 55% from £732 million in 2015.

The results were attributed to recent economic fortunes.

“As the economy has slowly recovered from the financial crises, businesses and individuals have shown an increased appetite to spend or invest more. That money is now falling into fraudsters’ sights. At the other end of the spectrum, as austerity continues to pinch many, some employees and consumers are adopting less than legitimate means to maintain lifestyles”, says the KPMG report.

Across regions, London and the South East accounted for the bulk of fraud losses. London and South East suffered more than £800 million worth of fraud last year, almost three quarters of all of the UK fraud. Damian Byrne, Forensic Director at KPMG in London and the South East blamed this result on “London’s position as a major financial and business centre”.

Looking at fraud trends in other regions, we see that investor fraud tripled in Scotland, leading to losses of £19 million. It was Scotland that saw 30 shell companies masking the identity of Israeli binary options fraudsters uncovered late last year. This has led the British police to label the binary options industry as the UK’s biggest ever Internet scam. The bulk of the industry operates from Israel but is regulated in Cyprus, which allows companies to offer their services across Europe while avoiding the regulatory grip of domestic watchdogs.

The average fraud claim against binary companies in Britain exceeds £20,000.

Back to the KPMG Fraud Barometer, the key findings for the North East show that investors have experienced the most substantial rise in fraud value, with £10 million worth of fraud committed against them in 2016, against £2.9 million in 2015.

In Yorkshire, high-value fraudulent activity targeting investors accounted for 61% ,or £11.7 million, of the total value of all fraud in the region. The value of fraud against financial institutions in the region has more than trebled in 2016, to £2.1 million.

The North West also displayed a worrisome picture for investor-related frauds, as the value of such fraudulent schemes against investors staging a jump of 89% during the year to £3.6 million. Graham Cochran, Forensic Director at KPMG in the North West, confirmed that bogus investment schemes continue to catch people out and often target the vulnerable in the UK society.

In the South West and Wales, investors and financial institutions were the main victims of fraud, accounting for 75% of fraud by value in the region.

The findings of the KPMG Fraud Barometer are in tune with the results displayed by the latest Crime Survey for England and Wales (CSEW), which showed that fraud was the prevailing type of crime in the year to September 2016. During that period, there were 3.6 million fraud and 2 million computer misuse offences.

Photo credit: KPMG.

Read this next

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

<