Financial services sector 'hit by fraud'

22/01/2010

Written by Neil Pointon

New research has revealed the extent to which the financial services sector was affected by fraud.

Figures released by the National Fraud Authority (NFA) show the industry has recorded the highest losses to such crime among any part of the private sector over the course of the past 12 months, with this activity estimated to be £3.8 billion.

Within this figure, mortgage fraud accounted for £1 billion.

Overall, fraud is estimated to cost the country £30 billion a year.

NFA chief executive Dr Bernard Herdan states: "We will use the data to help identify those areas of fraud that cause the most harm to the UK economy."

And such significant levels of fraud could see Professional Indemnity cover be the increasing target of legal action, as a Flaxman Partners report last September noted that an increase in fraudulent insurance claims tends to take place during economic recessions, with such cases often seeing claimants try to obtain more than they have lost.

© 2010 Adfero Ltd.

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