Annual fraud figures highlight extent of public sector fraud

Callcredit Information Group today welcomes the publication of the third Annual Fraud Indicator (AFI) by the National Fraud Authority - and says the results highlight the need for more fraud prevention measures, particularly in the public sector.

The NFA's figures show that public sector fraud is now estimated to cost the UK economy £20.3bn a year, while the total cost of all UK fraud now stands at £73bn.

Callcredit's own research has found that one of the biggest areas of public sector fraud is tenancy fraud, which it estimates costs the state £1bn a year.

Andrew Davis, director of public sector at Callcredit, said: "Today's figures show that public sector fraud accounts for 28% of all fraud in the UK - which represents a significant loss to the state at a time when local authorities and central government are working with increasingly squeezed budgets.

"We know from our extensive experience in this field that public sector fraud is soaring, and tenancy fraud is a particular issue. Indeed, we have found that despite the scale of the problem and the losses incurred, 90 per cent of all tenancy frauds are undetected.

"Like all frauds, tenancy fraud is not a victimless crime - it diverts resources away from the people who need them most and contributes to the UK's social housing waiting list now exceeding 2.3million.

"However, there are methods that can be used to tackle the problem quickly and effectively, such as carrying out simple checks on tenants or additional occupants to reveal whether a tenant is active at an address, or registered elsewhere.  We have found that implementing dedicated fraud prevention strategies can yield significant results.

"Today's figures are a timely reminder that more needs to be done to address all types of fraud and we are committed to working with local authorities, central government and other agencies to ensure that this problem is tackled effectively."

Callcredit's research, published in a new white paper entitled 'Shutting the Door on Tenancy Fraud', used data obtained from local authorities via the Freedom of Information Act, and also found that the most common type of tenancy fraud is unlawful letting (40 per cent) followed by non-occupation of a principal home (38 per cent).