Fraud cost UK economy £30 billion: Financial services biggest loser
Jan 22, 2010 | Comments 1
Fraud costs the Government, businesses and consumers £30 billion a year and according to the National Fraud Authority (NFA) financial services lose more to fraud each year than any other private sector industry in the UK.
It has been reported that in the private sector, the financial industry recorded losses to fraudsters, estimated to be £3.8 billion, with £1 billion in mortgage fraud and over £2 billion lost in insurance fraud. Plastic cards, online banking and cheque fraud comprised most of the remainder.
NFA made findings in the mortgage sector a culture of underreporting losses; it was only last March when Bradford & Bingley reported £40m mortgage fraud; however they set aside £270.8m. Experts in the industry put the real figure of mortgage fraud at closer to £1bn, according to the NFA.
To read more on this story go to ifaonline.co.uk.
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Filed Under: Business News
Some would argue that these figures need to be put into the perspective of the sheer size of the total market. If that is done they actually indicate that fraud is relatively small in comparison and there is absolutely no evidence that the fraud figure would be any different if the current regulatory regime did not exist. There is NO evidence.
However what is most concerning is the growing increase of mortgage Fraud. Undoubtedly this will ultimately mean that underwriters and insurers will have to insist that greater risk management steps are taken.