The DWP’s plans to scrutinise benefit claimants’ bank accounts for potential fraud could wrongly target innocent people, according to an expert. The new measures, part of the Fraud, Error and Debt Bill, will enable investigators to demand financial information to verify the accuracy of a benefit claim or to detect overpayments.
Yair Bennett, regulation expert and founder of BOI Agent, cautioned: “Valid claimants may be incorrectly flagged. Misidentifications in automated systems or human inaccuracy in financial data interpretation can generate stress.”
He also highlighted that those dependent on benefits could suffer “disproportionately” from false positive cases. Mr Bennett’s warning follows another expert suggesting that around 350,000 Universal Credit claimants might be erroneously pursued if past trends continue.
To mitigate the risk of wrongfully targeting people, Mr Bennett advocates for “robust appeal systems”, effective communication with claimants, and intelligent use of technology. He elaborated: “Anomalies can be identified by machine learning models, but humans should constantly supervise them.
“A mixed strategy with technology and manual reviews can work.” He believes these powers could come into effect within 12 to 24 months, but also said that implementation could be slow due to the necessary legal and tech set-up.
The compliance expert underscored the importance of the DWP focusing on preventing fraud rather than pursuing those who commit it. Mr Bennett remarked: “Simplifying benefit applications, making eligibility requirements clearer, and training claimants about compliance may reduce fraud.”
He also recommended integrating real-time data from HMRC regarding an individual’s income and employment into the benefits system, to pick up discrepancies, avoiding launching an investigation.
During her Budget speech, Chancellor Rachel Reeves announced the Government’s intent to reclaim around £4.5 billion lost to fraudulent benefit claims, pointing out that such fraud is frequently carried out by criminal gangs. The incoming legislation will empower officials to conduct searches of properties and seize assets where there is suspicion of organised crime being involved.
Sebrina McCullough, director of external relations at the free money advice service Money Wellness, expressed her concerns regarding the new measures. She cautioned: “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 highlighted the potential for honest claimants to be unjustly targeted, stating: “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.”