MP blasts government over wide-spread fraud in Universal Credit affecting 42,000 people

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11 Jul 2019
Wirral West MP Margaret Greenwood has pressed the government during an Urgent Question in the House of Commons after an investigation from the BBC revealed that a loophole in the online claiming system for Universal Credit is being exploited to make fraudulent applications and claim advances.

The BBC found that fraudsters have been contacting claimants and telling them that they can get them a government grant or a payday loan. The claimant then gives their details to the fraudster who then makes a Universal Credit application on their behalf; sometimes the fraud can be perpetrated without the claimant knowing. The DWP approves the claim and transfers the money into the claimant's bank account. The fraudster then takes a large portion of the money as a ‘fee’ and disappears.

Advances are currently available to claimants facing financial hardship who have to wait for five-weeks for their first payment of Universal Credit and they have to be repaid from Universal Credit over a period of up to 12 months.

According to one DWP official, the loss to taxpayers could be in the region of £20million.

In Parliament, Margaret Greenwood demanded answers from the government on a range of issues including:

- How much the government estimates this fraudulent activity is costing the taxpayer?
- How does that cost compare with the cost of abolishing the five-week wait?
- What action the government is now taking to make sure it verifies the identity of people who request an advance correctly?
- What action is the government taking to support claimants in financial hardship who have clearly been the victim of a scam?

Margaret Greenwood also asked how could it be that advances have been made to claimants with names such as Lisa Simpson, Bart Simpson and Homer Simpson?

As part of the debate, Justin Tomlinson, the Minister responding for the government, said that scam victims will not be expected to repay money fraudulently claimed on their behalf through no fault of their own.

Margaret Greenwood MP said:

“It is a matter of real concern that fraudsters are cheating both vulnerable people and the taxpayer out of large sums of money.

“It’s extraordinary that the government has set up a system for applying for advances in Universal Credit that is so open to fraud.

“People need to be alert to the fact that there are unscrupulous people presenting themselves as offering help to access social security support when in fact they are operating a scam.

“Anyone who needs to apply for an advance at the start of their Universal Credit claim should do it themselves directly online or ask for help from DWP.

Anyone who needs help applying for an advance payment can contact the Universal Credit helpline on 0800 328 5644 or via textphone on 0800 328 1344 between 8am and 6pm, Monday to Friday.