Public sector bears brunt of £38bn cost of fraud

Financial services companies took the biggest hit as the cost of fraud to the UK economy soared past £38 billion last year.

The 3.6 billion in annual losses suffered by financial firms as a result of fraud is down marginally from the previous year's figure, but represented the biggest impact on any industry, according to the annual indicator from the National Fraud Authority (NFA).

The fall was attributed to an improvement in the prevention of plastic card and cheque fraud, although the cost of online banking fraud was up 14 per cent to 60 million.

The losses to small and medium-sized businesses were estimated at 780m, according to the NFA, which said it hoped the information would spur new fraud prevention initiatives in the sector.

There was a rise of 8bn in the total losses arising from fraud, equating to an extra 765 per adult in the cost of goods and services.

The public sector accounted for 21bn of total losses, almost double the cost to the private sector, while individuals lost 4bn and charities 1.3bn.

Bernard Herdan, chief executive of the NFA, said: "Victims of fraud are found in all sections of society. Whether it is the public, private and charity sectors or as individual citizens, it is vital we join together to take action to stem the rising tide of fraud."