Prosecutions fail to keep up with growing fraud levels

5th February 2024

Figures published by KPMG UK’s Fraud Barometer, which records alleged fraud cases with a value of £100,000 and above, has revealed that the total volume of fraud cases heard in UK Crown Courts was 226 cases in 2023, up from 221 cases in 2022. In contrast, fraud value was £992.9 million, a slight decrease from £1.1 billion the previous year.

Fraud in the UK is perceived to be at unprecedented levels and according to the Home Office, fraud accounts for over 40% of crime but receives less than 1% of police resource. As overall fraud levels continue to rise, the latest figures appear to show the challenges that Crown Courts face in prosecuting perpetrators of this crime, and with case backlogs.

Commenting on the findings, Roy Waligora, Partner and Head of UK Investigations at KPMG, said “The timely prosecution of economic crime remains a challenge, so in the context of rising fraud rates, it is disappointing to see little change in the number of high-value fraud cases being heard in UK Crown Courts. Impending changes in the law intended to improve fraud prevention and reporting, including the ‘failure to prevent fraud’ offence introduced in the Economic Crime and Corporate Transparency Act 2023, combined with investment in technologies such as generative AI to improve fraud detection, could make it even harder for courts to keep up.”  

The most common victim type by value during 2023 was Government (£592.7 million), accounting for over half of the total value of fraud seen last year. This was followed by Commercial Business (£164.6 million) and Investors (£121.7 million).

Waligora added “Fraud against the government during the pandemic skyrocketed and our latest data illustrates that prosecuting offenders of this crime is an ongoing issue. With the cross-party Public Accounts Committee highlighting the need for the government to do more to recoup money lost to Covid-19 fraud, I expect to see this trend continue.”   

As the cost-of-living crisis continues, it is inevitable that cases of individuals stealing from their employer will become more prevalent. In 2023, employees and management were involved in nearly half of all cases (43 and 58 cases, respectively) to the combined value of £221.3 million. The steep decline in job hiring activity covered in a recent KPMG report may create pressure on individuals that could lead to increased levels of insider fraud.

Waligora concluded “We are likely only seeing the tip of the iceberg when it comes to fraud cases triggered by the cost-of-living crisis, and so businesses should ensure they have appropriate safeguards in place to protect against any potentially fraudulent activity from the inside.”

As with previous years, professional criminals were the biggest perpetrator type by volume (90 cases). Furthermore, the general public continues to be taken advantage of by fraudsters. In 2023, 78 cases of fraud were perpetrated against a member of the public, for a total value of just over £58.3 million, compared with 74 cases in 2022, totalling £137.4 million. Evidence4 also indicates that some individuals are becoming repeat victims of fraud.