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Fraud costs the UK £30bn a year

Fraud costs the UK over £30bn a year and the financial services industry is being hit with a £3.8bn bill, according to new estimates from The National Fraud Authority.

The data, which the NFA claims is far more comprehensive than the last widely accepted figure of £13bn released in 2007, shows that, of the £30bn, £15.2bn is lost through tax fraud while insurance and mortgage fraud cost the industry £2bn and £1bn respectively.

The Department for Work and Pensions loses another £1.1bn through benefit fraud.

The NFA says the report and overall fraud loss estimate will enable it and the Government to better prevent, detect and deter fraudsters and identify those areas of fraud that cause the most harm to the UK economy in a bid to tackle it more effectively.

The Authority used information from a cross-section of public and private sector agencies and found the public sector accounts for 58 per cent of the total figure while the private sector accounts for 31 per cent and fraud against individuals 12 per cent. But it says data collection is more sophisticated in the public sector.

In the private sector, the NFA says the financial services industry recorded the highest loss to fraudsters, estimated to be £3.8bn. Apart from mortgage and insurance fraud the remainder was mainly comprised of fraud in plastic cards, online banking and cheques.

NFA chief executive Dr Bernard Herdan says: “Although the figure appears far greater than the previous estimate, 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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  1. Many times less than the FSA’s rise in budget then.

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