Bank fraud predicted to only get worse as credit crunch bites harder

Bank fraud predicted to only get worse as credit crunch bites harder




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The first half of 2008 has seen court cases ascertaining alleged fraud against banks reach an all time high in two decades, as the latest research from KPMG has shown.

As the credit crunch rears its ugly jaws on the economy, the crisis is predicted to become even more of a problem for the already suffering financial world.
 
In total over £630m worth of 128 financial fraud cases were put before the courts in the first six months of the year. This compares to £421m in 91 cases in the last half of 2007 showing a roughly 50% increase.
 
Mortgage fraud seems to be a growing problem for banks. Headlines have been full of the FSA cracking down on brokers recently and banks are also finding themselves the subject of fraud and fines. In 2007 there were 10 cases equalling totalling £3.7m but in just the first six months of 2008 this figure had increased to £20m against 9 cases.
 
Some of the major cases of bank fraud seen recently include the £70m attempted fraud on HSBC’s securities services division and the £220m attempt to hack into Sumitomo Matsuis' systems.
 
One aspect the final survey doesn’t mention however, is the hugest alleged bank fraud so far, that of Jerome Kerviel, a former Societe Generale employee who is currently accuses of fraudulent activity amounting to billions.
 
 

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