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Mortgage fraud dropped almost three times in 2016

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  • 12/01/2017
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The value of mortgage fraud fell significantly in 2016, dropping from £151.1m in 2015 to £54.8m a year later, findings reveal.

According to the latest BDO FraudTrack analysis, the volume of mortgage fraud cases also dropped by more than three times, from 13 cases in 2015 to four a year later.

Despite falling figures in mortgage fraud, the analysis, which examines reported fraud cases over £50,000 in the UK, found that the total value of reported fraud in 2016 hit a five-year high, rising by 31.5% to £2.bn.

Overall, the value of reported fraud in financial services decreased dramatically by 62% to reach £214.9m in 2016. The volume of reported fraud also fell, dropping from 70 cases in 2015 to 58 cases in 2016.

Despite the volume of money laundering cases driving up from 15 to 20 in 2016, the sector showed the biggest fall in the value of fraud within financial services, down from £201.6m to £98.9m a year later.

One major money laundering case in 2016 saw a man arrested after he was suspected of holding a UK account linked to an organised crime ring. Following a raid on a home in the Welsh Valleys, police uncovered £30m worth of banker’s drafts in what is thought to be the biggest money seizure by UK law enforcement.

Kaley Crossthwaite, partner and head of fraud at BDO, said the figures were “encouraging”, with the value of fraud falling in most key areas and sectors of financial services.

However, she added: “Sadly, the findings of this research are just the tip of the iceberg and many frauds continue to go on undetected. In many instances, even when they are picked up, corporates prefer to resolve the situation privately to avoid the public scrutiny that inevitably comes from going to court.

“Our advice has always been and continues to be, to ensure that your businesses implement strict systems and controls to ensure that no one individual has unfettered access or responsibility over company accounts and that all systems and controls are tested regularly.”

Regionally, London and the South East and the West Midlands continued to be the biggest hotspots for fraud, excluding Yorkshire which snowballed by 388% to £1.02bn due to a £1bn VAT fraud in York.

Fraud targeted at individuals remained the most common type of activity, with scams involving the elderly and vulnerable making up the majority of these cases. Two of the biggest cases in this area recorded last year involved a £9m con that saw victims persuaded to sign up for satellite TV warranties they did not need and being missold deals to stop nuisance calls. The second case was a £3m scam involving five fraudsters who conned pensioners and young families into buying homes on land in Warwickshire that could never be developed.

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