The face of fraud has become more youthful, according to KPMG’s latest Fraud Barometer.
Data for the first half of 2014, which contains a record of all fraud cases, indicates that organisations have failed to spot a ‘changing of the guard’ as the profile of fraudsters shifts from rogue senior executives to younger individuals funding extravagant lifestyles.
KPMG’s analysis of the cases going through British Crown Courts since the start of 2014 shows that frauds committed by those aged 26-35 were valued at just over £62 million – an increase of 285% compared to the first half of 2013. At the same time, frauds committed by those aged 46 and over fell by 72% to £88 million.
Hitesh Patel, UK Forensic Partner at KPMG, says: ‘Today’s fraudster is younger and just at ease with using technology and data as selling promises. They rely on the assumption of the innocence of youth, whereas the reality is that many of these fraudsters are nothing more than a wolf in lamb’s clothing.
‘Where once it was the jaded executive who relied on unquestioned seniority and authority to get away with dipping their hands in the till, it seems we are witnessing a changing of the guard.
‘It is important for UK organisations to recognise that youth doesn’t always equal innocence, as a confident and tech savvy generation comes through, adept at circumnavigating conventional controls and staying under the radar.’
The latest figures also show that, for the first six months of 2014, the average case value was £2 million – a fall of 43 percent compared to that recorded between January and July 2013 (£3.5 million).
While this sounds like good news, history shows that fraudsters tend to start with smaller schemes, to test the system, with fraud value then increasing as their confidence grows if they are not caught.
The latest data shows, for example, that the increase in volume in the £1-10 million bracket was driven by a significant increase in insider fraud, with the number of employee-perpetrated frauds in this value range increasing more than ten-fold.
One case study showing the trend for insider activity – and the youthful nature of conmen – revolved around a 24 year old bank clerk who attached a device to a computer within the branch he worked at. The device allowed fictional deposits worth £1.1 million to be made into 15 customer accounts, which were then withdrawn by the customers and a colleague – all of whom had been colluding with the ring-leader.