Drastic action is needed to reduce £650 a year that fraud costs each household, according to an industry trade body.

Figures from the Association of British Insurers (ABI) reveal fraud is the fastest growing crime in the UK costing £16 billion a year.

ABI say insurance fraud accounts for around £1.5 billion a year, adding five per cent to people's premiums.

"The extent of fraud is under estimated, and its detection under resourced. Yet its impact is very real and serious. It has become as big a money earner for criminal gangs as drugs," said Nick Starling from ABI.
ABI wants to see a national fraud strategy developed with an action plan, targets and a process for accountability.

The association also recommends the formation of regional fraud squads to provide police with expertise and resources for the police and Crown Prosecution Service, and more comprehensive data on risks to different sectors.