Mortgages a quarter of total fraud

In its first Annual Fraud Report, the NFA, which is part of the Attorney General’s Office, said fraud cost the UK economy over £30bn in 2008.

Around 58% of all fraud was committed in the public sector, which included tax fraud at £15.2bn and benefit fraud at £1.1bn, while 31% was committed against the private sector.

The NFA took into account previously unpublished fraud loss figures, its own fraud estimates and data provided by private and public sector organisations to reach its conclusions.

It has promised to take a hard line on fraud and has set up Action Fraud, a national reporting centre, where victims can report financial crime and seek advice.

Dr Bernard Herdan, chief executive of the NFA, said the information will allow the body to develop clearer priorities to prevent, detect and deter fraudsters.

He added: “We will also use the data to help identify the areas of fraud that cause the most harm to the UK economy.”

Jonathan Cornell, communications director at First Action Finance, said the mortgage fraud figures were a result of a more relaxed attitude by lenders in the years before the recession.

He said: “I believe lenders are much more aware now and they have introduced strict underwriting criteria since 2007 because they understand how to tackle fraud so I hope the figures will decrease.”

Melanie Bien, director at Savills Private Finance, said vigilance was necessary as people were more likely to commit crimes in an economic downturn.

She added: “There has been a rise of sophisticated fraud schemes where lenders, brokers and solicitors have been acting together. Fraud will remain high as long as the recession continues.”