Findings from BDO’s Fraud Track report showed that despite the number of mortgage cases almost halving from 24 in 2014 to 13 in 2015, the value of fraud in the sector almost tripled from £57m to £151m last year.
This staggering increase was largely due to a £130m mortgage fraud case that occurred in the North East.
Ahead of mortgage fraud, third party fraud showed the largest increase in the value of cases within financial services, rising by £197m compared to 2014.
The report, which examined fraud cases over £50,000 in the UK during 2015, found that overall the total number of fraud cases fell to 519 from 546 in 2014.
However, the average value of fraud rocketed by 121% to £2.9m with some of the largest cases brought to court reaching over £250m. At the same time, the total value of reported fraud reached £1.5bn, soaring by 110% compared to the previous year, and the highest value recorded since 2011.
Financial services continued to account for more fraud cases than any other sector, with the value of cases more than doubling from £238m in 2014 to £567m in 2015. After this, public administration was the sector most susceptible to fraudulent activity, followed by mining, retail trade and healthcare.
Report author, partner and head of fraud at BDO, Kaley Crossthwaite, said the large increase in financial services fraud last year was due to a small number of very large cases.
“Stripping these ‘exceptional’ items out would show an apparent fall in volume and value year-on-year. Sadly this is not the full picture. Increasingly we are seeing high value complex fraud being dealt with outside of the judicial system as companies prefer to deal with these situations behind closed doors to avoid the reputational damage to their businesses,” she added.
“Our experience would suggest that both volume and value in real terms continue to rise despite efforts by companies in the sector to strengthen their processes.”