UK fraud losses soar to over £38bn
Public sector cops the lion's share of fraudulent scams
Fraud cost the UK economy more than £38bn over the last 12 months, according to the latest annual statistics from the UK's National Fraud Authority.
The figures represent an increase of nearly £8bn (or more than 25 per cent) for the losses recorded by the same Annual Fraud Indicator last year. Fraud in the public sector (£21.2bn) made up the biggest slice of the pie, with scams in the private sector costing £12bn and £4bn in losses coming in the form of fraud against individuals.
The NFA reckons the increase is explained, at least in part, by improved reporting procedures. For example, the figures include estimates for procurement (£2.4bn) and grant fraud (£515m) for the first time.
The financial services industry recorded £3.6bn in fraudulent losses last year, the highest figure in the private sector, a slight decrease in the £3.8bn recorded in 2009. Reduction in losses attributed to plastic card (£440m) and cheque fraud (£30m) were partly offset by a 14 per cent increase in online banking fraud, which swelled to £60m.
Mortgage fraud (£1bn) and insurance fraud (£2.1bn) both remain high.
Gavin Cunningham, a former officer in the Serious Fraud Office and now director in the specialist forensic fraud investigation firm, BTG Global Risk Partners, said that fraudulent losses in future are only likely to rise.
"These figures make grim reading for both private and public sector business leaders alike and reflect the significant financial impact of fraud in the UK," Cunningham said. "With the UK still struggling to recover from the recession and some uncertainty as to what the future may hold, there is unlikely to be a reduction in fraud in the short term; historically, there is evidence that fraud increases as a recession ends, in part because businesses uncover fraudulent actions as the effects start to build up and in part because there is more scrutiny of hidden and unknown costs in tougher times." ®