Mortgage fraud losses hit £1bn
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The National Fraud Authority has released estimates that fraud costs the UK over £30bn a year, with an estimated £1bn lost to mortgage fraud.
The NFA, part of the Attorney General’s office, says the new £30bn national fraud estimate is far more comprehensive than the last widely accepted figure of £13bn from a report produced in 2007.
The latest, higher figure has been driven by previously unpublished fraud loss figures, and the NFA’s own fraud estimates.
Within the public sector, the report from the NFA shows that the financial services industry was the hardest hit with fraud losses amounting to £3.8bn.
Out of this total mortgage fraud losses are estimated to be £1bn, and over £2bn is thought to have been lost to insurance fraud.
Dr Bernard Herdan, chief executive of the NFA, says: “With this vital information we can develop clearer priorities to prevent, detect and deter fraudsters.
“We will use the data to help identify those areas of fraud that cause the most harm to the UK economy.
“I have seen first hand the devastating effects fraud can have. It destroys lives and livelihoods.”
Mike Bowron, ACPO lead for economic crime, commissioner of the City of London Police, says: “We always believed that the true cost of fraud could be much higher than previous estimates.
“It is vital that we ensure that the methodology used to measure the cost of fraud on the UK economy is as up to date and as comprehensive as is possible.
“As head of the national lead force for the investigation of fraud I know the destructive effects that this type of crime can have.
“We look forward to continuing our work with the NFA and the rest of the UK’s Counter Fraud community and building upon our recent successes.”
Readers' comments (7)
Broon | 22 Jan 2010 9:53 am
So in direct contravention of the previous statistics published by MS we, collectively as an industry, have a 0.03% stake in that overall fraud figure.
The last report stated the mortgage fraud made up 18% of all fraud cases.
I am bewildered. It seems like flawed statistics are what passes an news these days.
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Anonymous | 22 Jan 2010 9:56 am
No doubt this will fuel opportunity for the regulators and lenders to point the finger at brokers, once again. In reality lenders lose most money due to unscrupulous lawyers - fact!
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Anonymous | 22 Jan 2010 10:56 am
Broon,
I think you will find that is 3.33%. Are you a mortgage broker?
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Anonymous | 22 Jan 2010 11:57 am
I am not at all surprised at the £1bn mortgage fraud. There is probably still an element of the self cert fraud mentality that if finding other ways of obtaining mortgages fraudulently although this is likely to gradually reduce as a result of stringent affordability and income verification criteria being applied. I do sincerely hope the FSA use more preventative measures to combat financial fraud rather than a reactive approach.
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Jo Bell | 22 Jan 2010 4:36 pm
What’s more terrifying is the ever growing cases of deceased identify fraud. With over 600,000 people passing away each year, members of the public can take pro-active steps to help reduce the chances of deceased friends and family becoming victims of this terrible crime.
By registering deceased friends and family on www.deceasedpreferenceservice.co.uk, direct mail companies who are responsible mailers and adhere to best industry practices should regularly screen against this database.
Jo Bell
Millennium
Shipley
West Yorkshire
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Glen McKeown | 24 Jan 2010 10:32 am
It's the "little old ladies being mugged" syndrome - all headline and no perspective.
Given the size of the mortgage and insurance market these figures are extremely small, and suggest a reasonably well run industry. There is always room and need for improvement, but the fraud level is probably never going to come down much below this figure - there will always be Madoffs out there. What the figures show is that we always need regulating - it just doesn't necessitate a Gestapo approach - and while we're talking about the FSA....
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Anonymous | 25 Jan 2010 10:23 am
Guys! If you don't want the FSA to overreact to this kind of information you need to send in a response to the Mortgage Market Review Discussion Paper (www.fsa.gov.uk/pubs/discussion/dp09_03.pdf) but you only have until 29th January to get your response in.
If you do nothing, the big institutions will get the rules bent to their way of thinking.
More brokers need to reply - you don't need to enter a response to every question so anything you send in has to be considered.
Do it now!
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