Fraud costs higher than expected

”Fraud

The National Fraud Authority (NFA) has revealed the extent to which fraud is having on the UK economy.

According to the NFA’s figures, fraud (including scams, online theft, insurance cheats and tax fraud) is costing the economy £30 billion a year - the equivalent of £621 per adult in the UK.

The figures have resulted in City watchdog, the Financial Services Authority, to take tougher action against those who commit fraud.

The NFA, which is part of the UK Attorney General’s Office, said tax fraud has risen to £15.2 billion per annum, while benefit fraud costs the economy £1.1 billion a year.

Furthermore, the Authority’s report said 31% of fraud was in the private sector and the remaining 12% is against members of the public.

In the meantime, false insurance claims cost the financial services industry £2 billion in 2009, while mortgage fraud cost £1 billion.

A report in 2007 report by senior police officers estimated the total was around £13 billion a year but the NFA said its figures were the most reliable to date.

However, Mike Bowron, City of London Police commissioner and the lead on fraud for the Association of Chief Police Officers, said: “We always believed that the true cost of fraud could be much higher than previous estimates.”

Dr Bernard Herdan, chief executive of the NFA, comments: “Although the figure appears on the face of it far greater than the previous estimate, we know 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,” added Dr Herdan.

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