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Anti-Fraud Organisations predict fraud surge In 2012

Anti-Fraud Organisations predict fraud surge In 2012
Friday December 30 2011

Research by of over 50 UK and European Fraud consultants reveals an expectation from over 80% of those polled, that fraud will increase dramatically across the UK and the rest of Europe in 2012.

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 whilst 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.

One of the fastest growth areas of fraud is expected to be internal fraud, as employees are put on notice of potential redundancy or those disgruntled long term members of staff whose career advancement is placed on hold by budget cuts. The other major growth area is expected to be global cybercrime, not least as the UK government is seen as attempting to tackle this recently with the launch of the UK Cyber-Crime Strategy last month.

Commenting on the research, one of those surveyed Malcolm Gardner, Managing Director of Visionary Network said, “Quite simply the unusual combination of circumstances has created the ideal environment for a ‘perfect storm’ for global fraud growth. 2012 could well be remembered as the year of fraud and corruption”.

Bill Trueman, CEO of was keen to stress that there are options for the more adaptive organisations to avoid the impact of fraud. He commented “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.”