The total value of loan and mortgage related fraud has risen by over £100 million in 2013, sparking major concerns over financial institutions’ due diligence.

According to accountancy giant, KPMG, fraud cases for the first half of 2013 totalled over £500 million, of which £160 million came from mortgage and loan related fraud cases, up from £59 million in the previous year, representing a 272 per cent increase.

Fraud cases committed against investors also saw a huge increase, with frauds totalling £74 million coming to court.

The KPMG ‘fraud barometer’ aims to identify different avenues of fraudulent behaviour against financial institutions every second quarter.

Speaking on the results, Hitesh Patel, UK forensic partner at KPMG, said: “What is clear from this year’s report is that fraud is on the up and remains a huge cost to government and the private sector. 

“It is a welcome development to see that the Government continues its fight against white collar crime.  A very severe punishment regime is being proposed in the sentencing guidelines consultation paper issued recently to tackle the growing scourge of white collar crime and the acknowledgement that the real cost of fraud is more than just financial.”

Interestingly, the ‘Big Four’ firm reported a huge balloon effect on fraud within the supply chain sector, with cases rising from just £1 million at this time last year, to over £60 million this year.

“While procurement functions seek to do relevant due diligence checks on potential suppliers, fraudsters are increasingly getting smarter at circumventing traditional procurement processes and controls.

“Organisations need to make the most of the numerous data sources available and overlay that with the information they have on a third party they plan to do business with.”