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Fraud Declines as Businesses Wise Up


The number of reported fraud incidents in Australia plummeted 40% last year, declining for the first time in several years, according to a KPMG Forensic report.

There were 155 reported frauds with a value of $482 million from October 2016 to last November, compared with 259 worth $823 million in the previous year, the group’s Fraud Barometer shows.

KPMG Forensic partner Gary Gill says the scale of the decline is surprising.

“Reported frauds can and do fluctuate due to various factors, but lessons about being more vigilant and aware of fraud risks seem to have been taken on board by companies,” he said.

Government bodies are increasingly targeted, accounting for the most losses in the year at $199.1 million.

“Technologically sophisticated” fraud – which includes hacking, compromising computer accounts, skimming digital data and porting mobile phones – accounted for 6% of frauds and 7% of the total value ($33.8 million).

Losses due to identity theft grew sharply to nearly $17.9 million.

Mr Gill says fraud by professional criminals is a “growing problem”, second only to crimes by business insiders. The latter accounted for 60% of frauds against commercial businesses, whereas external fraudsters were mostly to blame for attacks on government and financial institutions.

Fraudulent compensation and funding claims are on the rise, with many involving compulsory third party claims after fake, staged or minor vehicle accidents.

Major Australian frauds in the year included a $165 million tax scheme that siphoned PAYG payments through a complex web of payroll businesses, and a $128 million fraud against a punting syndicate in Victoria, where the perpetrator kept funds intended for betting on horse races.

Source: insuranceNEWS