Fraud in financial services = £3.8bn a year – The National Fraud Authority (NFA) has revealed fraud costs the UK more than £30bn a year – £3.8bn of which was lost in the financial services industry. According to the NFA’s recent report, the financial services industry recorded the highest loss in the private sector, estimated to be £3.8bn, with £1bn in mortgage fraud and over £2bn lost in insurance fraud. Based predominantly on 2008 data, the current fraud loss figures were collated by a specialist team at the NFA.
Using information gathered from a cross-section of public and private sector agencies, 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.
In addition, 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 £15.2bn, is approximately 3 per cent of total tax liabilities.
At the DWP, fraud loss was estimated at £1.1bn, which was 0.8 per cent of total benefit expenditure.
Meanwhile, the NFA said consumers are becoming more willing to report fraud, and in mass-marketing frauds, such as share sale fraud and lottery and loan scams, losses amounted to £3.5bn.
Dr Bernard Herdan, chief executive of the NFA, said: “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.”
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