The Government is poised to introduce new powers for the Department for Work and Pensions (DWP) to scrutinise the bank accounts of benefit claimants in an effort to tackle suspected fraud. Under new legislation, officials will have the ability to examine an individual’s financial activity to unearth evidence of illegitimate benefit payments.
The new policies are part of the forthcoming Fraud, Error and Debt Bill. Financial crime specialist Ben Fleming, from Ocean Finance, warned the new powers could come into use very soon.
He stated: “While there’s no confirmed start date for this DWP change, it’s likely these powers will begin to be used within the next year, as fraud prevention is usually a high priority for the Government.” Mr Fleming also issued a warning about the potential distress for innocent benefit recipients who may feel “unnecessary anxiety” over being mistakenly suspected.
He said: “Mistakes do happen, and the stress of being investigated can be overwhelming.” He said there needs to be proper safeguards to make sure the measures are used only when appropriate.
The expert said: “Clear communication is essential. If a claimant’s account is flagged, they should be notified promptly and provided with a straightforward explanation of the process. Any investigation should start with a conversation—not an assumption of guilt.
“Claimants should have the chance to explain any unusual transactions or discrepancies before further action is taken.”
He raised another point of concern, stressing that the DWP must take care to ensure it is correct when raising suspicions, urging that any automated checks should be supported by human review.
He also emphasised the need for claimants to have access to support services if they are being investigated, to ensure they understand their rights and receive help throughout the process. The new powers will enable banks to verify whether a claimant’s savings exceed the thresholds for means-tested benefits.
Officials may also search for signs of foreign transactions that could indicate a person is on an extended trip abroad, which is not permitted in line with their benefits. The DWP has clarified that it will not have the capability to view inside an individual’s bank account, nor will it share personal information with third parties.
Exploring other strategies to combat benefit fraud, Mr Fleming suggested: “Improving ID checks or cross-referencing information with other systems could help identify false claims before payments are made. However, this should be done carefully so it doesn’t create extra barriers for people who genuinely need help.”
He also called for measures to tackle the reasons why people turn to fraudulently claiming benefits in the first place. The expert said: “In some cases, financial pressure might push people into making dishonest claims. Offering better access to budgeting advice and support for those struggling could reduce the temptation to bend the rules.”