According to the National Fraud Authority (NFA), fraudsters are now costing the UK a massive GB pound 73 billion per annum due to their illegal activities.
This latest estimate brings together new and existing estimates of fraud, in turn allowing 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 Annual Fraud Indicator shows that fraud against the private sector represents the highest proportion of loss – with almost GB pound 19 billion worth of losses suffered by SMEs alone.
Estimated cost of fraud against the public and not-for-profit sectors is lower than previous estimates (at GB pound 20.3 billion and GB pound 1.1 billion respectively).
Total loss estimates by sector are as follows:
- Private sector: GB pound 45.5 billion
- Public sector: GB pound 20.3 billion
- Individuals: GB pound 6.1 billion
- Not-for-profit sector: GB pound 1.1 billion
Uncovering previously hidden losses
On a positive note, the latest overall estimate figure realised by the Annual Fraud Indicator does ably demonstrate the success of the NFA and its partners in uncovering losses which were previously hidden, in turn helping organisations to actively prevent this type of crime in the future.
Stephen Harrison, chief executive at the NFA, explained: “From large businesses and High Sttreet retailers through to pensioners in their own homes, we are all at risk of becoming the victims of fraud. It’s often a hidden crime but it can have devastating consequences.”
As far as Harrison’s concerned, fraud can be beaten. He stated: “We are building the tools to hit back. The Annual Fraud Indicator 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.”
Fighting fraud on a collective basis
Both the Government and the 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 type of crime.
The National Crime Agency 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.
Last year, of course, the NFA launched the Fighting Fraud Together plan in partnership with business and the voluntary and public sectors to reduce fraud increase intelligence sharing and bring more criminals to justice.
The plan brings together 37 public and private sector, voluntary and law enforcement agencies to improve the collective response to fraud and the damage it causes forboth individuals and the economy.
View from the Government
James Brokenshire, the minister responsible for crime and security matters in the coalition Government, commented: “For too long fraud has almost been seen as a victimless crime. It isn’t. It’s used by serious criminals to fund anything from human trafficking to drug dealing and, all-too-often, the victims are some of the most vulnerable members of our community.”
Speaking directly about the latest NFA report, Brokenshire said: “This report helps us understand the scale and nature of the threat, including a GB pound 20 billion cost to the public sector. Ripping off the taxpayer will simply not be tolerated, and 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.”
In conclusion, the minister explained: “Fraud committed by organised crime groups is estimated to cost the economy at least GB pound 10 billion. We’re fully confident that 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.”