This is according to the National Fraud Authority which has published its second Annual Fraud Indicator (AFI), which estimates fraud is costing the UK over £38 billion a year.
The financial sector saw 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, however, has seen an increase of 14% (£60 million) while mortgage fraud (£1 billion) and insurance fraud (£2.1 billion) remain high.
A new inclusion in the AFI is fraud losses to SMEs at £780 million. The NFA and the Federation of Small Businesses (FSB) worked together to produce this estimate – the first of its kind. It is hoped that raising awareness of the scale of loss will spur new fraud prevention initiatives in this sector.
The public sector remains the highest proportion of the fraud loss at £21 billion – 55% of the total figure. This estimate, for the first time, includes new and more accurate figures for procurement (£2.4 billion) and grant fraud (£515 million).
A better understanding of fraud in the public sector has led to the Cabinet Office setting up a cross-Government Counter-Fraud Taskforce which is overseeing a number of pilots to develop and establish counter fraud techniques that can be rolled out across the public sector. In addition to this, the NFA is progressing 15 different projects, many of which form a part of the Taskforce work, to help central and local government cut key fraud risks and deliver savings.
The NFA and law enforcement are working together to build increased capacity for disruption of criminal attacks against individuals, as well as better intelligence sharing and analytics to support enforcement action. Cross-government and industry work also continues to increase public awareness of fraud and how to protect against it.
Commenting, Dr Bernard Herdan, chief executive of the NFA, said: “Tackling fraud will not solely be achieved through more investigation, prosecution and punishment of fraudsters.
“The NFA is working with its partners to promote greater fraud awareness and self-protection, encourage organisations to adopt fraud proof systems, enable fraud reporting and facilitate better sharing of intelligence on fraudsters. We want to develop a stronger counter fraud culture, which helps to disrupt fraudulent activity across the UK and globally.”
Mike Cherry, policy chairman, Federation of Small Businesses, said: "The Federation of Small Businesses (FSB) was pleased to collaborate with the National Fraud Authority in capturing the cost of fraud to small businesses - around £2,800 per business, per year.
"The FSB is calling on small businesses to report fraud to the Action Fraud - in the knowledge that this information will be used to build up a full picture of fraud with prosecutions as a result."
