Universal Credit scam warning issued as the DWP vows to tackle fraud in the system

Universal Credit demand rose over the last two years or so as the economic impact of coronavirus hit home. Unfortunately, scammers utilised these elements to target already struggling households and these risks may ramp up once more as the Omicron variant looms.

What to look out for

Fortunately, Money Helper, the public advisory service, issued guidance on what Universal Credit scams are emerging along with what can be done to avoid them.

Money Helper said: “People who claim Universal Credit are being targeted by scammers offering low-cost loans or grants from the Government.

“You might be called by someone claiming to work for Jobcentre Plus, or contacted through social media ads. Many of the scammers have convincing websites, with Government logos and testimonials.

“They might ask for your ID and bank details, offer to make a claim for Universal Credit and apply for an advance payment on your behalf, taking some of this money as their fee.

“However the full amount of advance payments need to be repaid out of future Universal Credit payments. So you’ll end up paying back the whole amount borrowed.”

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Money Helper continued by advising people on what to do if they’re presented with a scam or dubious offer.

It said: “It’s important not to be tempted by these offers if you’re already claiming any of the benefits that are being replaced by Universal Credit. These include tax credits and Housing Benefit. This is because your old benefits will stop and the money you get on Universal Credit might be less than you’re getting now.

“If you’re simply offered a Government loan and asked to give your ID and bank details, the scammer might be trying to make a Universal Credit application without your knowledge. Don’t give out these details – as you might not be entitled to Universal Credit and this could be seen as benefit fraud.

“If you’re waiting for your first Universal Credit payment and need help applying for an advance payment, the Citizens Advice Help to Claim Service or your work coach will help you get the payment you need for free.”

On top of targeting innocent claimants, criminals have been known to take advantage of the benefits system itself. Fortunately, the DWP has vowed to rectify this as the Government was recently pushed in the Commons.

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Fraud in the benefits system

In early December, Dr Matthew Offord, the Member of Parliament for Hendon, questioned the Government.

He said: “To ask the Secretary of State for Work and Pensions, what steps her Department is taking to (a) identify and (b) reduce fraud within the benefits system.”

Yesterday, David Rutley, the Parliamentary Under Secretary of State at the DWP responded.

He said: “We are continuing to expand our Integrated Risk and Intelligence Service that coordinates the detection of, and response to, fraud risks from organised crime groups seeking to exploit the benefit system. This included preventing a large attack in May 2020, stopping substantial sums being paid out to scammers and led to a number of arrests.

“This has been further expanded, following investment at the Spring Budget and Spending Review, to further develop pre-payment ‘risking’ techniques and maintain our new Enhanced Checking Service for high risk claims.

“We have also revisited more than 900,000 high risk claims paid during the early period of COVID-19, which has generated over £400m in potential savings. Where fraud is established, we are committed to the use of appropriate penalties and to recovering monies from the perpetrators.”

To be eligible for Universal Credit initially, a person must be on a low income or out of work entirely.

They must also be aged between 18 and state pension age. There are some exceptions for those aged 16 or 17.

Claimants must not have more than £16,000 in savings and they must also be living in the UK when they claim.

Applications for Universal Credit are made online and impartial help can be sought from the likes of Citizens Advice and Money Helper.

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