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UK fraud hits record high after increase in cyber attacks

Man on computer, hacking, cyber
Dimitri Otis | Getty Images

The value of alleged fraud cases reaching U.K. courts totaled more than £1.1 billion ($1.36 billion) in 2016 as the increasing risk of cyber attacks and large-scale scams continue to threaten businesses, according to a report from accountancy giant KPMG.

A 55 percent year-on-year rise in the value of fraud from the previous year was largely due to a resurgence in so-called super cases, or incidents worth over £50 million. Though the cost of fraud in the U.K. was much higher than in previous years, the number of incidents was lower.

"The figures for 2016 tell us two things. Firstly, that we can expect more of these super frauds as challenging economic circumstances place pressures on businesses and individuals and as technology becomes more sophisticated. Secondly, that this is going to put even more strain on law enforcement agencies who don't have the resources to investigate every report of fraud that they receive: getting the large, often cross-border and complex frauds to court is extremely time consuming and resource intensive," Hitesh Patel, U.K. forensic partner at KPMG, said in a note.

KPMG found that £900 million of fraud stemmed from just seven super cases. In 2015, super cases amounted to £250 million and the U.K. based accounting firm argued the rapid increase of super cases in recent years may be reflective of fraud being a lucrative and practical proposition for those with sufficient technological abilities.


Global risk of cybercrime

Cyber attack threats have been widespread in recent months too with the European Union Security Commissioner acknowledging upcoming general elections throughout the continent could be at risk to foreign powers. President Donald Trump moved to accept the U.S. intelligence community's conclusion Russia had engaged in cyber attacks during the presidential election, according to the New York businessman's chief of staff, Reince Priebus.

Moreover, Lloyds Banking Group announced it would be working with law enforcement agencies to identify who may be behind a recent cyber attack, according to a Reuters report on Monday. The lender witnessed recurrent outages for customers attempting to access personal banking websites.

KPMG identified that fraudulent activity against U.K. businesses were up seven-fold from the year previous. Internal fraud committed by employees and management remained the most common type of fraud to impact business operations.

"This places much more emphasis on businesses and consumers to protect themselves from fraudsters who will take advantage given the opportunity," Patel added.