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The Minister is considering a proposal to grant banks access to all accounts of benefits claimants as they attempt to crack down on fraud to fix the “open hole” of the UK welfare system.
People who are being described on the issue say that workers at the Work Pension Bureau are being asked to investigate the proposal as a measure that could prevent them from holding more funds than welfare recipients claim. .
“We are considering whether we can access the claimant’s bank account so that all accounts are accessible when we apply for a mortgage,” one official said.
The Public Authority (Fraud, False, Recover) bill notifies the government to the lender if it finds evidence of overpayment by the state or violation of the eligibility rules, including when the claimant holds £16,000 or Requests to do so. Accounts where they receive their benefits.
Under laws moving through parliament, the government will have the power to collect benefits or overpayments from individual accounts without a court order.
However, the minister is concerned that fraudsters can circumvent the rules by keeping cash in different accounts named that banks are not obligated to scrutinize, according to those who are described on the issue.
“There’s a big hole in the system,” one of them said.
The person added that the authorities are investigating whether open banking principles can be applied to welfare systems. This model has been used by mortgage lenders since 2018 and gives banks read-only access to customer account balances and transaction history.
However, they added that scoping exercises are in the early stages and are unlikely to form part of current fraud, error and recovery bills.
Approximately £8.6 billion was lost due to fraud and overpayments for the fiscal year ending April 2024, according to government data.
Approximately 3.7 million people of working age receive health-related benefits. This is an increase of 1.2 million compared to February 2020 before the Covid-19 pandemic.
According to the Senate Committee on Economic Affairs, the UK spends around £65 billion a year on more capacity and disability benefits than defense.
The UK’s finances, an industrial group, have opposed the new fraudulent measures, claiming that banking requirements could conflict with regulatory obligations to protect financially vulnerable consumers.
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“The proposed approach to collecting money from public authorities’ bank accounts needs to be carefully considered to ensure that it does not pose any risk to vulnerable customers and is consistent with existing regulatory obligations. There is… Daniel Chichikocky, Director of Economic Crime Policy for UK Finance, said:
Carla Prudencio Luis, director and advocacy officer at Privacy International, said the driving force to further expand the scope of government authority is “deeply troublesome” and “covers the fundamental rights of privacy and due process. “He warned.
“In principle, it is a generalized monitoring mechanism,” Prudencio said. “The (government) will take part in fishing expeditions looking for suspects without necessarily having a basis for doubt.”
A government spokesperson said: “The government is pushing generations forward to cracking down on the biggest frauds, saving taxpayers £1.5 billion over the next five years.
