UK Public sector loses £21 billion in fraud, 55% of the overall annual total..

According to the Annual Fraud Indicator just published by the UK National Fraud Authority (NFA) it seems that £38.4 billion was lost to fraud in the UK last year and of this a staggering £21 billion (55%) is due to losses in the public sector.  By comparison £12 billion (32%) was lost by the private sector, £4 billion (10%) by individuals and £1.3 billion (3%) by charities.

I am not at all surprised by the way that the NFA has presented these figures, a public sector organisation it seems to be trying to downplay the significance of the public sector fraud losses by saying that 'in part it is due to more diligent reporting by the the public sector'.   I'm still spinning from that one (excuse the pun!). 

The published UK budget deficit (ONS) for December 2010 is £16.8 billion, with total net debt of £2322.7 billion.  In this age of austerity, significantly reducing public sector fraud losses would make a huge impact on the budget deficit, thereby reducing the needs for cuts elsewhere.

The financial services industry is possibly the most diligent in trying to drive down fraud losses by investing in fraud prevention measures, and has seen some great success, partly due to the roll out of 'Chip and PIN' or EMV cards and terminals.  The industry lost £3.6 billion (included in the private sector loss figure).  The good news is that this figure was down slightly on the previous year's figure of £3.8 billion, thanks to improved fraud prevention methods involving plastic cards - resulting in a cut of £440 million - and cheque fraud - £30 million.  In contrast, online banking saw an increase of 14%, to £60 million. The NFA attributes this to criminals using more sophisticated methods to target customers through malware and a spike in phishing incidents.

It would be nice if the UK public sector would take the lead from the financial services industry and become more diligent in tackling fraud, by investing more effort and money, to seriously tackle its massive annual fraud loss figure........thereby (hopefully) reducing the austerity squeeze on the long suffering tax payer.  You can download the NFA Annual Fraud Indicator here