2. What is the Annual Fraud Indicator?
The Annual Fraud Indicator (AFI) is a compendium of fraud loss indicators.
In line with Fighting Fraud Together, the AFI covers fraud against all types of victims in the UK be they
public, private, not-for-profit or individuals.
It also includes primary research in the form of surveys e.g:
•
The Private Sector Survey
•
The Charity Sector Survey
The report brings together existing estimates of fraud in the public domain e.g:
•
HMRC (National Statistics)
•
DWP (National Statistics)
•
NHS
•
UK Payments
•
ABI
3. Measurement of fraud
NFA business plan 2012-13
“To improve our measurement of the scale and breakdown of the fraud problem and to develop more
sophisticated and rigorous measures of performance across all areas of fraud awareness, prevention and
enforcement”.
The AFI will be improved in the following ways:
•
There will be improved confidence levels in the fraud estimates across different
sectors.
•
Gaps in our estimates of fraud losses will be reduced.
•
Where we have reliable measures of loss affecting particular sectors, we will begin
to track changes in fraud loss levels.
4. Annual Fraud Indicator 2013
•
The AFI 2013 is the NFA’s fourth Annual Fraud Indicator
•
This year the report puts fraud loss to the UK at £52 billion
•
The AFI does not indicate trend – it seeks to highlight the
potential scale of the problem.
•
The AFI is an important tool in raising awareness of
fraud
5. AFI 2013 Headline Findings
•
The AFI covers fraud against all types of victims – public, private, charity and
individuals.
•
This year’s report includes identified fraud loss of £15.5bn and hidden fraud losses
£36.5bn by type of victim. This equates to £52 billion.
Fraud by Victim Type
Private Sector fraud - £21.2bn
Public Sector fraud - £20.6bn
Charity Sector fraud - £147m
Individuals - £9.1bn
6. AFI 2013 – Identified fraud losses
‘Identified fraud’ - fraud that has been
measured, or extrapolated based on a
measurement exercise or survey.
7. AFI 2013 – Hidden fraud losses
‘Hidden fraud’ – fraud that has not been
detected nor identified through a
measurement exercise or survey.
8. Charity Sector Survey 2013
The survey research design improvements.
•
Sampling frame excluded charities with less than 100k income:
•
•
Better specification of the fraud loss estimate questions to enhance cognitive
understanding:
•
•
Assumptions have been applied to the data received from larger charities to
estimate a small charities fraud loss figure in the overall fraud loss estimate.
Reducing ambiguity in the question and ensuring more consistency in responses.
More robust analysis:
•
Outliers and bias designed out by the above.
•
Weighting the percentage fraud loss by income band.
9. Breakdown of loss
Quantitative survey with 1,599 charities. 9% were a victim of fraud.
Estimated losses of 0.22 per cent of income (£66bn), with 0.04 per cent lost to identified
fraud and 0.17 per cent lost to hidden fraud. This is approximately equivalent to £147m per
annum.
Victim
Identified
Hidden
Total
fraud loss
Up to £100,000
£1m
£4m
£5m
£100,001 - £500,000
£11m
£5m
£16m
£500,001 - £5 million
£14m
£9m
£23m
£5 million +
£4m
£99m
£103m
(Income band)
11. Fraud enablers – cyber and
insider
•
1 in 10 (9.2%) of charities with an income over £100,000 detected fraud
•
13.6% of victims said that the fraud(s) they had suffered were cyber-enabled
•
23.1% of victims said that the fraud(s) they had suffered were insiderenabled
•
Only 21% of charities attempt to measure their fraud loss
12. How does the charity sector compare
to others?
3.76% Public sector
1.03% Individuals
0.54% Private sector
0.22% Charity sector
Losses quoted as a percentage of turnover/income
