The NFA, the Government's strategic lead agency on fraud, has also recently launched Action Fraud, the UK's first national fraud reporting centre. The service is a single point of contact for fraud victims, where they can both report a fraud and seek guidance and advice.

Based predominantly on 2008 data, the current fraud loss figures were collated by a specialist team at the NFA. Using information gathered from a cross-section of public and private sector agencies, the public sector accounts for 58 per cent of the total figure, the private sector 31 per cent and fraud against individuals 12 per cent (4).

It is important to note that the public sector figures reflect more mature and sophisticated measurement processes and a willingness to share this data for inclusion in the NFA's first fraud measure. Private and voluntary sector fraud information is significantly patchier. The figures relating to these sectors are as accurate as possible, but nevertheless likely to underestimate the total private sector amount.

In addition, the public sector amount represents a relatively small percentage when taken in context of the sector's overall turnover. For example, within this figure tax fraud, the highest single area of fraud loss, estimated at ?15.2 billion, is approximately 3% of total tax liabilities. At the DWP, fraud loss is estimated at ?1.1 billion, which is 0.8 per cent of total benefit expenditure.

In the private sector, the report shows that the financial services industry recorded the highest loss to fraudsters, estimated to be ?3.8 billion, with ?1 billion in mortgage fraud and over ?2 billion lost in insurance fraud, with fraud in plastic cards, online banking and cheques comprising most of the remainder. The consumer goods and manufacturing industry are estimated to have lost ?1.3 billion and ?1 billion respectively. The technology, media and telecommunications industry had losses of ?948 million. Credit and debit card fraud is estimated to be 0.1 per cent of total transactions.

Consumers are also becoming more willing to report fraud, and in mass-marketing frauds, such as share sale fraud and lottery and loan scams, losses amounted to ?3.5 billion.

Attorney General Baroness Scotland QC, who superintends the NFA said: "The NFA Annual Fraud Indicator is a milestone in tackling fraud. It means we now have a much more accurate fraud picture which is crucial so we can better target fraudsters..

"However, we have a way to go. We need more organisations to measure and report the money they lose to fraud, so we can continue to build our knowledge and response to this endemic crime."

CEO of the NFA Dr Bernard Herdan said: "The NFA's unique position has allowed us to work with the counter-fraud community to build the UK's most reliable and comprehensive fraud loss estimate ever. Although the figure appears on the face of it far greater than the previous estimate, we know this is because we have included many additional figures that other studies have not.

"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. Reducing the cost of fraud is important but even more significantly I want to stop more people from becoming victims. I have seen firsthand the devastating effects fraud can have. It destroys lives and livelihoods."

ACPO lead for Economic Crime, Commissioner Mike Bowron of the City of London Police welcoming the report, said: "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. We can then have confidence when using this data to help support and inform government policy in this important area of policing.

"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."

The author of the 2005 estimate, Professor Michael Levi has also welcomed the new figure: "The NFA should be applauded for these initial efforts at improving our map of fraud. However, this measurement is just the beginning. We now need to use this data to reflect on what we can do about our vulnerabilities and what we need from ourselves and from others to tackle them better."

Notes to Editors

1. National Fraud Authority Annual Fraud Indicator, published January 2010.
2. The Nature, Extent and Economic Impact of Fraud in the UK, Michael Levi et al, commissioned by ACPO, February 2007.
3. In areas where figures were not available, such as for mortgage and charity fraud, estimates were developed by either extrapolating smaller studies or by gathering estimates in consultation with leading industry experts.
4. Figures have been rounded up.

To see a copy of the PDF National Fraud Authority Annual Fraud Indicator report please go to: www.attorneygeneral.gov.uk/nfa. The report will be available on the NFA website from 9am Friday, 22 January.

The NFA, established in 2008 is the Government's strategic lead organisation on counter-fraud activity in the UK. It works with a range of stakeholders across the private, public and third sector. The Authority manages 15 priority areas which include improving data sharing between public and private organisations, mass marketing fraud, share sale and mortgage fraud, ID fraud and improving victim support. For more information about the NFA visit: www.attorneygeneral.gov.uk/nfa