£127bn corruption crimewave

Bombshell report reveals the City’s . . .

A BRIBERY and fraud crimewave is sweeping Britain and is costing the City £127bn a year, a devastating report has revealed.

A major study by City of London Police has uncovered how fraud is costing the economy as a whole £193bn – with the vast majority of this being lost through false invoices, dodgy payments and fake contracts.

The study suggests banks, charities and the NHS are all major victims. And it shows that the public is also suffering, with millions of people falling victim to identity theft and other scams every year.

The annual fraud indicator study identified that in total the private sector loses £144bn each year.

The biggest component was procurement fraud – involving crimes such as the creation of false invoices or contracts awarded in exchange for bribes. As an example the police highlighted the case of two men convicted in February last year after being caught submitting invoices worth £700,000 for non-existent maintenance work.

The report’s authors estimated around £1 in every £20 spent on procurement last year was fraudulent. That’s just 5pc of the £2.7trillion total spend.

Ian Dyson, commissioner of the City of London Police, said: ‘This report illustrates what investigators see on a daily basis, that the cost of fraud to business, individuals and the public sector is vast and continues to rise.

‘What the report can’t illustrate is the human cost of fraud which ruins lives and blights every community in the UK.’

Payroll scams were seen as a major issue. These involve attempts to get a company to overpay its salary bill – for example, by adding non-existent employees to its books and then pocketing their monthly wages.

Overall, it is estimated this costs the UK economy £1.9bn.

Even charities are not immune. Around £1.9bn is believed to be stolen by fraudsters from them each year, 2.5pc of total funds.

And the public sector is a target. HMRC loses £15.4bn through tax fraud, while suppliers, staff and prescription users rip off the NHS to the tune of £2.4bn. Another £205m is lost on TV licence fees, and £2.4bn is falsely claimed in benefits or evaded in council tax.

The finance industry, meanwhile, suffers from its own problems.

There are an estimated 350 false insurance claims a day, costing the sector £1.3bn a year. Another £1.3bn is lost to mortgage fraud and, in total, financial services firms lose around £3.2bn a year.

The rise of the internet has sparked a startling rise in so-called phishing attacks where criminals seek to trick internet users into sharing confidential information. This has increased by 21pc and are estimated to cost Britain more than £280m.

Savers are also increasingly vulnerable to sophisticated online scams. Fraud against individuals now costs £9.7bn a year and at least 3.3m people a year fall victim to mass-marketing cons. Identity fraud is also growing.

The report was based on research by University of Portsmouth academics, backed by Experian and accountant PKF Littlejohn.