A criminal expert has warned new powers that will allow the DWP to look at details of claimants’ bank accounts carry a “high danger” of wrongly targeting people.
The new measure will allow officials to request details of a person’s finances in cases of suspected fraud where a person is wrongfully receiving payments or being overpaid.
Benson Varghese, criminal defense attorney and founder of Varghese Summersett, warned: “These powers carry a high danger of improper targeting.
“A 2022 National Audit Office assessment found that six percent of Universal Credit fraud investigations were based on faulty assumptions or inaccuracies, stressing thousands of claimants.
“If current patterns continue, some 350,000 Universal Credit claimants may be unfairly investigated. An unexpected bank account deposit, such as a family gift or one-time reimbursement, may be misunderstood as fraud.”
His comments come after another financial crime expert warned the checks could cause “unnecessary anxiety” for innocent claimants fearing they will be wrongly targeted.
The new powers are part of the Fraud, Error and Debt Bill. Mr Varghese suggests the new measures could start to be used from late 2025 or early 2026, as the previous HMRC Connect legislation took 12 to 18 months from being passed into law before it was deployed.
He said the DWP should specify its investigation criteria before doing the checks, and there should be an independent supervision body to look at a suspected case before contacting the claimant.
He said: “Claimants should also be informed of their rights during inquiries by the DWP. In a similar Canadian approach, claimants were given written notice and the chance to clarify suspicious activities before further action. To ensure procedural fairness, the DWP must follow suit.”
The criminal expert pointed to other ways to reduce fraud, saying a lot of these wrongful payments could be avoided with better initial inspections.
Explaining how this could work, he said: “Cross-referencing claimant data with HMRC or DVLA systems could prevent discrepancies without post-approval inquiries.
“Unintentional inaccuracies may also be reduced by public education efforts about reporting changes. The ONS reports that 25 percent of benefit overpayments are due to claimant errors, not fraud.”
Sebrina McCullough, director of external relations at free money advice service Money Wellness, warned there is a lack of clarity about what safeguards will be in place to make sure the measures are used properly.
She said: “Without full details of the bill, it is unclear what controls and oversight will be in place to prevent misuse or misapplication of these powers.”
She also raised concerns that claimants could be wrongly targeted: “Our concern is that these measures may inadvertently harm vulnerable individuals more than they deter large-scale fraud.
“Safeguards must include clear oversight to ensure transparency in how data is used. As well as proportionality in targeting suspected fraud and a robust appeal process to protect individuals from being wrongly accused.”
She further called for “enhance communication” to make sure claimants understand their right and responsibilities.
Rachel Reeves said when delivering the Budget that £4.5 billion would be recovered by the government in a fraud crackdown on benefits. She said such activity was often carried out by criminal gangs.
