national fraud authority - annual fraud indicator

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  • Annual Fraud IndicatorJune 2013

  • Contents

    Foreword by Stephen Harrison .......................................................................................................................................... 2

    Introduction ............................................................................................................................................................................... 3

    Summary ...................................................................................................................................................................................... 7 Key findings ................................................................................................................................................................................. 7

    Fraud by victim ........................................................................................................................................................................ 13 Public sector .............................................................................................................................................................................. 13 Private sector ............................................................................................................................................................................. 17 Charity sector ............................................................................................................................................................................ 21 Individuals. ................................................................................................................................................................................. 24

    Fraud by enabler .....................................................................................................................................................................26 Insider-enabled fraud ............................................................................................................................................................. 27 Identity-enabled fraud ...........................................................................................................................................................29 Cyber-enabled fraud ...............................................................................................................................................................30 Organised Crime Groups ....................................................................................................................................................... 32

    Fraud by type ...........................................................................................................................................................................34 Benefit fraud ..............................................................................................................................................................................34 Blue Badge Scheme misuse ................................................................................................................................................. 35 Council tax fraud ......................................................................................................................................................................36 Grant fraud ................................................................................................................................................................................. 37 Housing tenancy fraud ..........................................................................................................................................................38 Insurance fraud ......................................................................................................................................................................... 39 Mass marketing fraud .............................................................................................................................................................40 Mortgage fraud ........................................................................................................................................................................ 42 Motor finance fraud ................................................................................................................................................................ 42 National Savings and Investments fraud ......................................................................................................................... 43 Online ticket fraud ...................................................................................................................................................................43 Patient charges fraud .............................................................................................................................................................44 Payroll fraud ...............................................................................................................................................................................45 Pension fraud ............................................................................................................................................................................ 47 Pre-payment meter scams ....................................................................................................................................................48 Private rental property fraud ...............................................................................................................................................48 Procurement fraud ..................................................................................................................................................................49 Recruitment fraud ...................................................................................................................................................................49 Retail banking fraud ...............................................................................................................................................................50 Student finance fraud ............................................................................................................................................................. 52 Tax fraud ..................................................................................................................................................................................... 53 Telecommunications fraud ...................................................................................................................................................54 Television license fee evasion .............................................................................................................................................. 55 Transport fare evasion ............................................................................................................................................................ 55 Vehicle excise duty evasion ..................................................................................................................................................56 Conclusion ..................................................................................................................................................................................56

    Annex 1: Technical note ....................................................................................................................................................... 57

    Annex 2: Breakdown of losses by victim ......................................................................................................................65

  • Annual Fraud Indicator 2013

    2

    Foreword Stephen Harrison, National Fraud Authority Chief Executive

    I am extremely pleased to publish the Annual Fraud Indicator (AFI) 2013, which has an important role in raising awareness to ensure that individuals and organisations protect themselves against fraud, and report fraud when they fall victim.

    This years AFI has put the loss to the UK economy from fraud at 52 billion. Individuals can experience financial loss which can also have a significant emotional cost, especially for vulnerable victims. Private sector businesses suffer the highest levels of loss and can also suffer other impacts like reputational damage. Loss to smaller businesses can even put their future at risk. Defrauding the taxpayer, particularly in the current challenging circumstances, is unacceptable and takes resources away from providing front line services. The AFI has developed year on year to provide the most robust estimates of fraud loss to date, whilst clearly highlighting the gaps in identified (measured or surveyed fraud) and hidden (or undetected) fraud. The AFI does not indicate whether fraud losses overall have increased or decreased. Rather it provides an indicative estimate of the potential scale of the problem nationally by drawing on a compendium of fraud loss estimates.

    The AFI 2013 is different to previous AFIs in that it includes estimates of a greater number of fraud types. We have also improved the quality of these estimates in a number of areas. Learning from the responses to last years questions, this includes asking more informed people of their views on their personal or sectors fraud losses. This has led to lower estimates of fraud loss in some areas, but an increase in the reliability of these estimates. This still significant loss to fraudsters is undoubtedly a very important part of targeting fraud prevention and enforcement work where it is most needed, and where

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