Banks are targets as fraud rises

The level of fraud could rise as the credit crunch begins to bite

Two big cases of fraud against banks in the UK have led to a 50% rise in the value of fraud cases coming to court in the first half of 2008.

An alleged £220m attempt to hack into Sumitomo Matsui's systems and a £70m attempt at HSBC contributed to £630m worth of fraud cases.

There were also nine cases of mortgage fraud worth over £20m, according to the KPMG Fraud Barometer.

In the whole of 2007 there were only 10 cases of mortgage fraud, worth £3.7m.

The Financial Services Authority has recently warned that banks and building societies need to be on their guard against mortgage fraud.

Examples include people providing fake payslips or making up second jobs.

The figures so far do not reflect the impact of the credit crunch.

"The fear is that we will not see the real and full fraud impact of the crunch for another six or twelve months or even more, as businesses start to take a closer look at their operations in this difficult economic climate," said Hitesh Patel, partner at KPMG Forensic.

"The signs are that we could end up seeing some substantial losses being suffered."