More than 80% of UK and European fraud consultants polled expect fraud to increase dramatically across the UK and the rest of Europe in 2012, according to research by UKFraud.co.uk. The areas likely to be most affected include: insurance, merchants and retailers, telecoms, government departments and local authorities. The most common fraud activities are expected to be cybercrime, internal fraud, supply chain and procurement fraud. The only area where fraud is expected to remain stable or to fall is the credit card sector where recent aggressive anti-fraud measures have forced fraud levels to fall.
Unsurprisingly, the leading cause of the increase, highlighted by the research, is the current global economic outlook, as austerity bites deep into most European states alongside rising taxes and increasing unemployment. One of the more specific concerns in the UK is the pressure on budgets of the state anti-fraud organisation the National Fraud Authority (NFA). Their own current estimate of UK fraud runs at £38bn, which is more than double the £13bn projection in 2008.
Many commentators expect an even bigger rise in the new year, when the latest figures are announced. It has also become a major concern to some respondents that the NFA has had to fight for their budget since being brought under the wing of the Home Office. And while some feel that government departments lack the commercial anti-fraud expertise to drive the fight against fraud forwards, the research suggests that the existence of the NFA means that the UK is seen by some as conceptually ‘ahead of the game’ across Europe.
Bill Trueman, chief executive officer (CEO) of UKFraud.co.uk, said: “At the moment the international and domestic picture of increasing fraud most closely resembles a tidal surge. It is likely that despite all the organisation and effort to combat fraud, that the currently unprecedented frequency and scale will brand 2012 as the year when fraud risk was at its most pernicious. Rather than waiting for macro-economic or pan-European policy to take effect, individual and organisations are best to prepare and strengthen their own individual defences quickly and increasingly more comprehensively.”
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