New National Fraud Authority (NFA) figures show that fraud is costing the UK more than £38bn, with private sector losses making up 31 per cent – that’s £12bn – of the total annual figure. The figures also reveal the impact fraud has on individuals (losses of £4bn), charities (£1.3bn) and the government (bearing the brunt at £21bn).
The research into fraud in the private sector shows that:
- The financial services industry recorded the highest loss to fraudsters at £3.6bn. This is a slight decrease on the 2010 figure of £3.8bn due to improved prevention methods involving plastic-card fraud (£440m) and cheque fraud (£30m).
- Online banking, however, has seen an increase of 14 per cent (£60m) in fraudulent crime.
- Mortgage fraud (£1bn) and insurance fraud (£2.1bn) remain high.
- Fraud losses to SMEs stands at £780m. The NFA and the Federation of Small Businesses (FSB) worked together to produce this estimate – the first of its kind. It is hoped that raising awareness of the scale of loss will spur new fraud prevention initiatives in this sector.
“The figures quoted are gargantuan but what is worrying is that public sector fraud amounts to over half at £21bn. Are our government’s systems so weak that fraudsters can wheelbarrow the money away at the rate of £57m a day?” asks David Ingall, a partner at business advisory firm JWPCreers.
Jonathan Russell, partner at accountancy firm ReesRussell, warns that fraud can be as simple as hourly-paid employees logging hours that aren’t worked and taking sick days when not ill to using the company’s goods privately. “This is the so-called victimless crime, such as our MPs fiddling expenses, that is now starting to become unacceptable,” he says.