A criminal expert has issued a warning about new DWP powers to scrutinise claimants’ bank account details that carry a “high danger” of improperly targeting individuals. The new measures will permit officials to request financial details in cases of suspected fraud where an individual is thought to be wrongfully receiving payments or being overpaid.
Benson Varghese, a criminal defence attorney and founder of Varghese Summersett, cautioned: “These powers carry a high danger of improper targeting.” He pointed out that a 2022 National Audit Office assessment found six percent of Universal Credit fraud investigations were based on faulty assumptions or inaccuracies, causing stress for thousands of claimants.
The legal expert warned: “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.”
Another financial crime expert recently warned that the checks could cause “unnecessary anxiety” for innocent claimants, who may fear 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 suggested that the DWP should clearly define its investigation criteria before conducting checks and called for an independent body to review suspected cases prior to contacting claimants.
He stated: “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 also highlighted alternative methods to tackle benefit fraud, noting that many incorrect payments could be prevented by having more thorough initial checks. He explained: “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.”
Another person with major concerns about the new measures is Sebrina McCullough, director of external relations at Money Wellness. 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 voiced worries about the potential for claimants to be unjustly affected, saying: “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 is also calling for improved communication from the DWP to ensure claimants are fully aware of their rights and responsibilities.
Rachel Reeves said during Budget that £4.5 billion would be recovered by the government in a fraud crackdown on benefits. She said criminal gangs were often to blame for such fraudulent behaviour.