How fraudsters are fleecing you of at least pounds 330 every year.
Fraud is costing the UK at least pounds 13.9bn a year, a report compiled for police chiefs by a Welsh academic revealed yesterday. When the estimated losses from income tax fraud, under-reporting and fraudulent applications for European Union grants are added, the true cost of fraud rises to pounds 20bn, according to criminologist Professor Michael Levi of Cardiff University.
This is equivalent to a loss of pounds 330 to every man, woman and child in the country every year - although Prof Levi says the true figure may be far higher.
The report was specially commissioned by the Association of Chief Police Officers. It represents the first major official attempt to put a figure on the total cost of fraud to the UK economy and took a year to produce.
The pounds 13.9bn figure is a 'conservative' estimate of the overall loss to the UK through fraud, the report says.
The latest internet scam is 'lonely hearts fraud', where people using internet chatrooms or dating websites are duped into starting online relationships with people who turn out to be confidence tricksters.
They are persuaded to part with large amounts of money as a result of sob stories from their supposed partner.
'What I want to do is to kill the term 'white collar crime' because it kind of legitimises it,' said Mike Bowron, Commissioner of City of London Police and Acpo lead for economic crime.
'Fraud is very serious and we all pay for it one way or another.'
The biggest losses, around pounds 6.4bn a year, are borne by the public sector.
Fraud costs the financial services industry - banks and insurance companies - pounds 1bn, while the cost to business overall is almost pounds 4bn.
Individuals lose out to the tune of pounds 2.75m a year, according to the report. It costs another pounds 1bn a year to combat fraud and deal with the consequences of it.
Prof Levi analysed key data from global reports and national surveys to assess the true cost of fraud in the UK.
Mr Bowron said, 'Professor Levi and his team have conservatively estimated that in 2005 fraud cost the UK pounds 13.9bn.
'But this figure excludes some major areas of criminality, such as income tax and EU fraud, where statistics are simply not available.
'Adding estimates for these into the mix, it is likely that fraud represents a pounds 20bn annual loss to the UK. To put this figure into perspective, such losses would pay for an additional 200,000 police officers or save every man, woman and child pounds 330 per year.
'It used to be said, 'No one walks down the street in fear of being embezzled'. Well increasingly they do.
'Whereas once the average Briton dreaded being burgled or having their car broken into, they are now worried about identity fraud, mass marketing scams and other forms of financial crime that have a serious impact on our lives. Long gone is the notion that fraud is a victimless crime.' The Government's response to its review of UK fraud will be unveiled next Thursday. It is likely to contain plans for a National Fraud Reporting Centre and reform of the criminal justice system. The Home Office said it welcomed the report. 'It is thorough and well-balanced research into an important area and we will carefully study its conclusions and recommendations,' a spokesman said.: The web of fraud costing taxpayers billions:Benefit fraud - Frauds of various kinds upon the social security system, ranging from widespread 'working and drawing' by employees in casual agriculture and fisheries sectors, via housing benefit frauds to the more common failure to notify benefit officials of changes in circumstances Charity fraud - Frauds in which donations are stripped from entirely fictitious or unregistered charities, or are embezzled from registered charities
Cheque fraud - Most frauds on individuals' cheques are covered by guarantees up to a particular limit, depending on the card type (pounds 50-pounds 200) if presented at the time
Consumer frauds - A broad category including lottery/prize scams; rogue dialling and other communications-based frauds
Counterfeit money - A direct loss to the individuals/ businesspeople given counterfeit money
Embezzlement - This normally either involves accounts manipulation or the construction of false invoices
Gaming frauds - This refers to 'fixed' races and other forms of sport upon which spread betting and other gaming wagers have been made
Insider dealing/market abuse - The report says this is 'particularly difficult to classify' Insurance fraud - Insurance companies may be victims of a variety of frauds by businesspeople (eg arson for profit, maritime fraud) and consumers (eg inflated claims, fictitious claims) Tax fraud - involves failure to pay either direct, indirect, or excise taxes.
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Mar 8, 2007|
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