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Daily Insurance Industry News
Sunday 20th of January 2019
January 23, 2010

The cost of insurance fraud: £2bn a year

by Gill Montia

Story link: The cost of insurance fraud: £2bn a year

Fraud is costing the UK £30 billion a year with the insurance sector taking a £2 billion hit, the National Fraud Authority (NFA) has reported.

The body, which was set up as part of the Attorney General’s Office in October 2008, puts the current cost of UK fraud at £621 per adult and places around 58% (£17 billion) of fraudulent activity in the public sector.

HM Revenue & Customs is estimated to be losing out on £15.2 billion annually, or 3% of tax liabilities.

However, some 31% of losses come in the private sector and the financial services industry is losing around £3.8 billion, including £1 billion a year in mortgage fraud, according to the NFA.

Meanwhile, £2 billion is lost to insurance fraud, with the balance of the total being made up from online banking, cheque and card fraud.

Commenting on the figures, Nick Starling of the Association of British Insurers says: “Dishonest insurance claims alone cost around £2 billion year, which adds on average an extra £44 a year to every household’s general insurance budget.”

He adds: “The insurance industry’s zero tolerance policy towards fraud means we are making it harder than ever for cheats to succeed … today’s report shows that such a policy is needed by all agencies involved in tackling fraud, to protect potential victims better and reduce the financial cost to honest UK households.”

 

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