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DWP Website - The homepage of the Department for Work and Pensions on the UK Government website

Universal credit hit by scam

Claimants of universal credit have been hit by a scam, with tens of millions of pounds of public money believed to have been stolen. Claimants are left owing hundreds, as fraudsters targeted Britain’s main welfare benefit.

Criminals exploited a loophole in the online system to make fraudulent applications and claim advance loans. One job centre is said to believe more than a third of claims are suspected of being fake, while £100,000 of fraudulent activity each month was recorded at another branch.

Such claims include one from "a 19-year-old with six blind children" and another saying footballer "Harry Kane" was their landlord. Despite one of the original goals of universal credit being to save billions of pounds in fraud and error, findings suggest fraud rates on universal credit are about four times higher than most other benefits.

The scam works by a criminal contacting a claimant saying they can get them a government grant or payday loan. When the claimant hands over their details, the fraudster makes a universal credit application on their behalf, sometimes unbeknown to the claimant. When the Department for Work and Pensions (DWP) approves the claim and transfers funds to the claimant’s bank account, the fraudster demands a hefty “fee” and will take a large amount of the cash and disappear. This leaves the claimant owing the entire amount of the loan to the DWP.

The first the victim knows that it is actually a scam is often when the DWP writes to say they are now on universal credit, and that any other benefits they are on are being stopped immediately.

The DWP said it had already secured its first conviction for this type of fraud. DWP minister Baroness Buscombe added: "We're encouraging people to listen to their instincts. If someone offers you a low-cost loan from the government, they may be trying to steal your identity.”

Read: BBC News - Universal credit: Multi-million pound scam targets claimants