Fraud nears record levels in 2008

The value of mortgage fraud cases in 2008 was 10 times higher than in 2007

More than £1bn worth of fraud cases were heard at UK courts last year, the highest level since 1995, according to a survey from consultancy KPMG.

This is the second highest level of fraud in the 21-year history of the firm's Forensic's Fraud Barometer.

The value of mortgage fraud cases was £36m, almost 10 times higher than the £3.7m recorded in 2007.

But worse is to come, warned KPMG - most of the fraud committed since the credit crunch has yet to come to court.

KPMG warned that mortgage fraud would become "more visible" as property prices continue to fall and lending remains tight.

Worsening trend

"These figures are bad enough in themselves, but I fear the trend for the next couple of years will be even worse," said Hitesh Patel at KPMG.

"As the global economic downturn takes hold it is very likely that more fraud will come to light," he added.

While fraud by professional gangs remained pretty constant, fraud by individuals increased dramatically.

Individual cases of fraud accounted for around £300m, a three-fold increase on 2007.

Professional gangs accounted for £806m.

The financial services sector suffered from £388m of alleged fraud - a 10-fold increase on 2007. However, £220m of this total was accounted for by an alleged £220m attempt to hack into Sumitomo Matsui Banking Corporation's systems.

Companies were badly hit, with a five-fold increase in fraud, up from £24m worth of cases in 2007 to £125m last year.

"Internal frauds are becoming more prevalent and should set alarm bells ringing within organisations. In difficult times, they could even become the tipping point between the survival and demise of an organisation," said Mr Patel.