Fraud in the UK hit a 12-year high in 2007, as crooks increasingly turned to the Internet to carry out ID theft, according to KPMG Forensic

Last year, £1 billion of fraud came to court, the highest value since 1995 and the second highest in the 20 years KPMG has been carrying out the report, called the Fraud Barometer. At the same time the number of cases brought to court dropped to 197 from 277 in 2006.

Organized gangs were responsible for £889 million of the takings, nearly 90 per cent of the fraud by value, most of which was through VAT fraud, ID theft and other forms of white collar crime.

The firm said technology has become the new battleground for fraudsters, with much of the danger from ID theft coming from the Internet.

"The sophistication of organized fraud in the U.K. is certainly extremely concerning," said KPMG Forensic partner Hitesh Patel, in a statement. "More fraud cases have been coming to court in recent years than previously, but one fears that this is just the tip of the iceberg. As companies tighten their belts in the harsher conditions and take a closer look at their operations and related expenditure, it is highly possible that a greater number of frauds may be detected."

Patel recommended that companies add anti-fraud analysis tools to their usual monitoring and oversight processes.

The top target of fraudsters was the government, whose agencies were hit by £833 million in fraud, a jump from £221 million in 2006.

ID theft was a major source of fraud, for instance being used in false benefits and tax credit claims. A husband and wife team were responsible for £1.1 million in benefits fraud, claiming benefits for eight adults and 46 children in a one-bed flat in London.

Financial institutions saw the value of fraud against them fall from £140 million in 2006 to £37 million in 2007, while businesses were hit by £24 million in fraud compared to £81 million the previous year.

Employees and management carried out a roughly similar number of frauds - 36 and 34 respectively - but management snagged £54 million, nearly twice the £27 million that employees did.

While technological threats are the latest tool for fraudsters, many criminals' methods were surprisingly low-tech, KPMG said. A Midlands-based gang stole homeowners' identities by posing as would-be buyers, collecting enough details on the house to apply for title deeds from the Land Registry and then remortgaging the properties, coming away with £500,000.