DWP bank account checks called ‘step too far’ as some wrongly targeted | Personal Finance | Finance

Fresh concerns have been raised about new powers which will allow officials to look at bank account details of benefit claimants suspected of fraud.

In efforts to stop people wrongly receiving benefits, investigators will be able to order banks to hand over financial information of suspects.

The Fraud, Error and Debt Bill will also grant powers for officials to raid properties and seize items to stop criminal gangs exploiting the benefits system.

Sebrina McCullough, director of external relations at debt advice group Money Wellness, warned the new legislation could be excessive as there are already laws in place to investigate bank accounts of fraud suspects.

She said: “To propose legislation that forces banks and building societies to report data on a mass scale is a step too far.

“The Government says it wants to rebuild trust with the nation – the first step shouldn’t be creating what is essentially a surveillance charter on how people earn, spend and save.

“There is a very real risk that harm will be created and it is unlikely to achieve the stated objective of preventing large-scale fraud.”

One expert said the powers may well be deployed for cases involving people on means-tested benefits, such as Universal Credit, Jobseeker’s Allowance, Employment and Support Allowance and Housing Benefit.

Ms McCullough pointed to the much more pressing issue of benefits overpayments which are causing heartache for claimants.

She said: “By far a greater problem is overpayment and how it’s clawed back, which forces claimants into crisis and situations where it’s impossible to live.

“Around 30 percent of benefit claimants seeking debt support each day do so as a direct result of being unable to repay a benefit overpayment.

“Often the problem doesn’t lie with the claimant, but with how the claim is processed. We’ve even seen several instances where on investigation people were found not to have not been overpaid but were still pursued for money.”

Asked for details about how the new powers will work, a DWP spokesperson said: “We are cracking down on benefit fraud to save the taxpayer £1.6billion over the next five years while protecting vulnerable customers from racking up debt through overpayments.

“Staff will be trained to the highest standards on the use of any new powers, which will be used appropriately and proportionately and monitored through robust, new oversight and reporting rules.

“DWP will not have access to people’s bank accounts and will not share their personal information with third parties.”

Ms McCullough pointed to another glaring problem with the benefits system – the fact that £20billion in benefits goes unclaimed every year.

She explained: “Any legislation must consider not just how to prevent fraud but also how to use the data available to proactively engage people who should be claiming but do not know they are entitled.

“The system must be simplified and streamlined which, in itself, should mean that issues naturally fall and fewer claimants will be vilified in the process.”