Fraud is costing the UK economy nearly £200bn per year – or more than £6,000 per second – with businesses being the biggest targets, a report out today has discovered.
The study discovered that the private sector was losing roughly £144bn of the £193bn total lost to fraud every year.
In particular, procurement fraud, such as issuing fake invoices and awarding contracts off the back of bribery, accounted for £127bn of the fraud the report identified.
Meanwhile, payroll fraud – where money can be lost through a business' payroll system by, for example, setting up ghost employees or logging unauthorised hours – accounted for £12bn in losses each year.
However, Chris Clark, UK and Ireland chief executive at Experian, stressed that fraud was not an issue confined to businesses alone, remarking: "Although 95 per cent of the fraud taking place is not a direct to end consumer cost, those lost funds are passed on to individuals in the form of higher costs on products and services. Every transaction we make, whether that is buying a washing machine or putting money into a savings account, is affected by the fraud epidemic."
Jim Gee, head of forensic counter fraud services at PKF Littlejohn, added:
[Fraud] is best seen as similar to a clinical virus – something which continually mutates and changes as fraudsters seek the greatest benefits for the least risks. The best way to reduce its extent and cost is to make sure our organisations are fraud resilient and able to protect themselves against a continually evolving threat.
The Annual Fraud Indicator 2016 was overseen by the UK Fraud Costs Measurement Committee, supported by Experian and PKF Littlejohn and based on research from University of Portsmouth’s Centre for Counter Fraud Studies.
Today's figures may also suggest that the vast majority of fraud goes unreported. A report released by accountancy firm KPMG earlier on this year pegged the value of fraud cases that made it into a courtroom at just £732m, while BDO discovered that the value of reported fraud reached £1.5bn last year.