UK fraud hits £38 billion

Fraud is costing the UK over £38 billion a year, according to the National Fraud Authority’s (NFA) second Annual Fraud Indicator (AFI).

The public sector remains the highest proportion of the fraud loss at £21 billion - 55 per cent of the total figure.

Private sector fraud losses amounted to £12 billion making up 31 per cent of the total annual figure. Fraud against individuals was10 per cent of the total at £4 billion while charity fraud stood at £1.3 billion.

Within the private sector, financial services recorded the highest loss to fraudsters at £3.6 billion. This is a slight decrease on the 2010 AFI figure of £3.8 billion due to improved fraud prevention methods involving plastic card (£440 million) and cheque fraud (£30 million).

Online banking has seen an increase of 14 per cent to £60 million, while mortgage fraud remained at £1 billion and insurance fraud hit £2.1 billion.

Mortgage fraud
There are no exact figures for mortgage fraud and the £1 billion is an estimate based on mortgage lenders’ opinions - the NFA contacted 98 per cent of the mortgage market. The estimates provided fell broadly in line with the fraud loss figure of £1 billion reported in the AFI 2010.

The NFA says this estimated figure should be viewed in the context of a significant decline in mortgage lending during 2009. Mortgage lending fell by 44 per cent from £254 billion in 2008 to £144 billion in 2009.

In 2008, losses of £1 billion would have accounted for 0.4 per cent of total lending. In 2009 it accounts for 0.7 per cent of lending. However, as this estimate is based on industry opinion only, it is not possible to conclude that mortgage fraud increased from 2008 to 2009.