Fraud costs financial services £3.8bn a year

by Gill Montia

Story link: Fraud costs financial services £3.8bn a year

Fraud is costing the UK £30 billion a year, according to the National Fraud Authority (NFA), which was set up as part of the Attorney General’s Office in October 2008.

The figure is more than double a previous official estimate of £13 billion in 2007, and puts the current cost of fraud at £621 per adult.

According to the NFA, around 58% (£17 billion) of fraudulent activity is in the public sector, with HM Revenue & Customs losing out on an estimated at £15.2 billion (or 3% of tax liabilities).

However, some 31% of losses come in the private sector and the financial services industry is estimated to be taking a £3.8 billion annual hit, including £1 billion a year in mortgage fraud.

Meanwhile, £2 billion is lost to insurance fraud, with the balance of the total being made up from online banking, cheque and card fraud.

Both the Government and NFA say they are already working hard to crack down on fraud, having proposed new measures to combat public sector crime in a White Paper entitled “Smarter Government’”, published last month.