UK fraud hits 12-year high as methods go high-tech

Fraud in the UK hit a 12-year high last year as criminals increasingly turned to technology.

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The UK suffered more than £1bn of fraud in 2007, 90 per cent of which was perpetrated by organised gangs carrying out ID theft and VAT scams, according to the KPMG Forensic Fraud Barometer.

One of the largest ID thefts was a £1.1m scam where a couple claimed benefits for eight adults and 46 children.

Government was the primary target, suffering £833m fraud. Banks were scammed for £37m - down from £140m in 2006, commercial businesses lost £24m - compared to £81m in 2006, and accounting fraud stood at £20m.

London and the South East was the main fraud hotspot, representing 65 per cent by value, or £655m and more than 35 per cent of the reported cases.

A spokesman for KPMG said high-tech cons such as phishing and other online scams are providing new opportunities for criminals.

He said: "A lot of this ID theft is being carried out online. Technology is the new battleground on which fraud is being fought and the fraudsters are becoming more and more sophisticated."

Authorities and companies need to keep up with the fraudsters using technology such as analytical software to spot unusual patterns of activity.

In a statement Hitesh Patel, partner at KPMG Forensic, predicted fraud could continue to rise this year: "Given the developing economic conditions, companies and individuals need to be more alert than ever to the fraud threat."