NFA reveals true cost of fraud in UK is £30bn a year

Fraud costs the UK £30bn a year according to the National Fraud Authority (NFA); far more than the previous government estimate of £13bn annually taken from the Association of Chief Police Officers (APCO) Levi report.

The figures issued by the NFA equate to £621 for every adult in the UK. The report from the agency set up in October 2008 to take charge of fighting fraud, is the UK's first comprehensive survey into the crime.

The NFA, part of the UK Attorney General’s Office said the ACPO figure has only captured a proportion of the true fraud loss, as it only referenced publicly available information.

The new higher figure is the result of the NFA collating previously unpublished fraud loss figures, and producing its own estimates in areas where fraud data was unavailable.

Dr Bernard Herdan the NFA’s chief executive officer said: "The NFA's unique position has allowed us to work with the counter-fraud community to build the UK's most reliable and comprehensive fraud loss estimate ever.

"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."

Based predominantly on 2008 data, the current fraud loss figures were collated by a specialist team at the NFA. Using information gathered from a cross-section of public and private sector agencies.

"Most of the fraud £17bn (58 per cent) was committed in the public sector. HMRC (Her Majesty's Revenue and Customs) had the highest losses with tax fraud put at £15.2bn. The public had to absorb the cost of public sector fraud with most of the losses clawed back through taxes and rising prices for products and services.

In the private sector, the financial services companies and organisations suffered the heaviest losses amounting to £3.8bn through crimes such as mortgage and insurance fraud, plus online banking, cheque and card fraud.

Consumers have been conned out of an estimated £3.5bn a year in scams such as share and lottery fraud.

Other sectors also reported huge losses, including the consumer goods industry, manufacturing, technology, media, and telecommunications with losses of over £2bn.

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

Attorney General Baroness Scotland QC, who superintends the NFA, said: "The NFA Annual Fraud Indicator is a milestone in tackling fraud. It means we now have a much more accurate fraud picture, which is crucial so we can better target fraudsters.

"However, we have a way to go. We need more organisations to measure and report the money they lose to fraud, so we can continue to build our knowledge and response to this endemic crime."

"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 first hand the devastating effects fraud can have. It destroys lives and livelihoods."