Record drop in UK fraud cases in 2020 due to COVID

The volume of cases heard dropped from 369 in 2019 to 180 in 2020 – a decrease of 51 per cent, according to KPMG.

The COVID-19 pandemic pushed the value of alleged fraud cases to just under £724 million, from £1.1 billion in 2019.

The areas most impacted in 2020 were procurement, loan and mortgage, counterfeit goods, and misappropriation of assets fraud, KPMG said.

Procurement fraud rose by 200 per cent compared with 2019 – from £16 million to £49 million – while the value of loan and mortgage fraud ballooned 675 per cent from £9.7 million to over £75 million, with the number of cases dropping by one.

Although the number of cases dropped from 19 down to five in the 12-month period, KPMG revealed the value of fraud secured through counterfeit, pirated or below stated quality goods activities rose over 415 per cent, from £39 million to over £202 million.

Further, tax fraud, including tax refunds, evasion of duty, evasion and VAT fraud fell by 93 per cent from £721 million to £54 million over the same period.

However, KPMG head of UK investigations Roy Waligora said that as we reflect on the 2020 fraud data, the brewing backlog of untried cases continuing to build up like water behind a dam cannot be ignored.

“Businesses and the general public must be cognisant of the fact that the drop in both the value and volume of fraud cases is not reflective of a downturn in economic crime, but rather fallout following the COVID-19 lockdown restrictions on the courts,” Mr Waligora said.

“We know that disruption and uncertainty make for inviting economic components for fraudsters. COVID-19, coupled with Brexit, which tipped the scales towards the end of 2020, means that 2021 will remain at high risk for fraud and economic crime.

“While a tsunami of fraud is still expected to hit the courts in 2021, it is evident that progressive measures, such as virtual courts, being put in place to manage the upcoming cases will likely ease the backlog.”