Cost of fraud revealed in new report
Fraudsters are costing the UK an estimated £73billion a year the National Fraud Authority (NFA) announced today.
The third Annual Fraud Indicator (AFI) provides the best estimate of the cost of fraud to the UK economy.
Annual Fraud Indicator
Often thought of as a ‘victimless’ crime, the report shows the true extent to which fraud touches all sectors of society - from big business to the most vulnerable individuals.
The latest estimate demonstrates the success of the NFA and its partners in uncovering losses which were previously hidden, helping organisations to actively prevent this type of crime in the future.
Stephen Harrison chief executive of the NFA said:
‘From large businesses and high street retailers to pensioners in their own homes, we are all at risk of becoming victims of fraud. It is often a hidden crime but it can have devastating consequences.
‘But fraud can be beaten and we are building the tools to hit back. The AFI allows us to target resources in the areas worst hit. It gives a sense of the real size of the problem and helps raise awareness, incentivising us all to better protect ourselves.
‘Last year we launched Fighting Fraud Together in partnership with business and the voluntary and public sectors to reduce fraud increase intelligence sharing and bring more criminals to justice.’
Total loss estimates
Today’s estimate brings together new and existing estimates of fraud to allow the NFA to reveal losses which would otherwise remain hidden.
In particular during the last year the NFA sought to fill gaps in its knowledge by conducting primary research into the scale and nature of fraud against the private and not-for-profit sectors; procurement and payroll fraud; identity and mass marketing fraud against individuals; and the organised crime threat.
Due to this improved research for the first time the AFI shows that fraud against the private sector represents the highest proportion of loss - with almost £19billion suffered by small to medium businesses. Estimated cost of fraud against the public and not-for-profit sectors is lower than previous estimates at £20.3billion and £1.1billion respectively.
Total loss estimates by sector are:
- private - £45.5 billion
- public - £20.3 billion
- individuals - £6.1 billion
- not-for-profit sector - £1.1 billion
Both the government and NFA, which was created to tackle fraud, have been working hard with a wide range of partners across all sectors to crack down on this crime. The National Crime Agency (NCA) will spearhead the fight against serious and organised crime and its Economic Crime Command will focus on bringing fraudsters and organised financial crime gangs to justice.
Fighting Fraud Together
In October last year the NFA published Fighting Fraud Together (FFT) - the national strategic plan to reduce fraud. The plan brings together 37 public, private, voluntary and law enforcement agencies to improve the collective response to fraud and the damage it causes to individuals and the economy.
James Brokenshire Minister for Crime and Security said:
‘For too long fraud has almost been seen as a victimless crime. It isn’t - it is used by serious criminals to fund anything from human trafficking to drug dealing and too often victims are some of the most vulnerable members of our community.
‘Today’s report helps us understand the scale and nature of the threat, including a £20billion cost to the public sector. Ripping off the taxpayer will simply not be tolerated. The government’s strategy to reduce fraud is already producing results - this includes Fighting Fraud Together which allows us to better target, prosecute and prevent fraud.
‘Fraud by organised crime groups is estimated to cost at least £10 billion. The new Economic Crime Command in the National Crime Agency will provide a more effective and co-ordinated response to deal with fraudsters and other serious criminals.’