The National Fraud Authority (NFA) has released the UK’s first comprehensive fraud estimate which estimates that fraud costs the UK over £30 billion a year or £621 per adult.
The public sector accounts for 58 per cent of the total figure, the private sector 31 per cent and fraud against individuals 12 per cent.
- The public sector amount represents a relatively small percentage when taken in context of the sector’s overall turnover. For example, within this figure tax fraud, the highest single area of fraud loss, estimated at £15.2 billion, is approximately 3% of total tax liabilities. At the DWP, fraud loss is estimated at £1.1 billion, which is 0.8 per cent of total benefit expenditure.
- In the private sector, the report shows that the financial services industry recorded the highest loss to fraudsters, estimated to be £3.8 billion, with £1 billion in mortgage fraud and over £2 billion lost in insurance fraud, with fraud in plastic cards, online banking and cheques comprising most of the remainder. The consumer goods and manufacturing industry are estimated to have lost £1.3 billion and £1 billion respectively. The technology, media and telecommunications industry had losses of £948 million. Credit and debit card fraud is estimated to be 0.1 per cent of total transactions.
Consumers are also becoming more willing to report fraud, and in mass-marketing frauds, such as share sale fraud and lottery and loan scams, losses amounted to £3.5 billion.
CEO of the NFA Dr Bernard Herdan said: “The NFA’s unique position has allowed us to work with the counter-fraud community to build the UK’s most reliable and comprehensive fraud loss estimate ever. Although the figure appears on the face of it far greater than the previous estimate, we know this is because we have included many additional figures that other studies have not.
“With this vital information we can develop clearer priorities to prevent, detect and deter fraudsters. We will use the data to help identify those areas of fraud that cause the most harm to the UK economy. Reducing the cost of fraud is important but even more significantly I want to stop more people from becoming victims. I have seen firsthand the devastating effects fraud can have. It destroys lives and livelihoods.”
