Financial Crime World

Financial Fraud Statistics in New Zealand Hit $21.6 Million Mark, Study Reveals

A recent study by KPMG’s Forensic team has revealed that financial fraud in New Zealand has reached a staggering total of $21.6 million over the past 12 months. The findings, part of the company’s annual Fraud Barometer, highlight the need for businesses and organizations to strengthen their internal controls and fraud risk management frameworks.

Perpetrators of Financial Fraud

  • Company owners and management continue to be the most common category of perpetrators by volume.
  • Advisers and employees follow closely behind.
  • Business owners are also the most common category of perpetrators by value, accounting for a significant proportion of the total amount lost due to fraud.

Notable Incidents

  • A $8.7 million fraud involving property investors who obtained fraudulent home loans between 2015 and 2016 highlights the importance of robust internal controls and regular audits.
  • The government sector continues to be a major target for fraudsters, with Inland Revenue accounting for around 60% of the cases reported in this year’s Barometer.

Cybercrime on the Rise

  • Financial losses due to cybercrime have increased by two-thirds in the first quarter of this year.
  • Regulators are taking steps to address greenwashing claims and clamp down on misleading ESG claims, which is likely to lead to an increase in investigations, enforcement actions, and complaints.

Occupational Fraud Prevention and Detection

  • 70% of victim organizations have hotlines in place to report fraudulent activity.
  • The study notes that artificial intelligence (AI) is being used to create new forms of fraud, which are becoming increasingly sophisticated and difficult to detect.

Combating Financial Fraud

  • KPMG’s Forensic team offers a range of services, including:
    • Fraud maturity assessments
    • Risk assessments
    • Confidential whistleblowing hotlines
    • Independent investigations
  • The company emphasizes the need for all organizations to consider their fraud risk management framework and internal controls to prevent and detect fraud.