Fresh fears have been expressed about new powers that will allow officials to access the bank account details of benefit claimants suspected of fraud, sparking concerns it will lead to excessive surveillance. The Fraud, Error and Debt Bill aims to prevent people from wrongly receiving benefits by granting investigators the power to order banks to hand over financial information of suspects.
Officials will also be able to raid properties and seize items to stop criminal gangs taking advantage the benefits system. However, Sebrina McCullough, director of external relations at debt advice group Money Wellness, has warned that the new legislation may be too far-reaching, as existing laws already allow for the investigation of bank accounts of fraud suspects.
McCullough stated: "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." Finance experts have suggested that the new powers may be used in cases involving means-tested benefits, such as Universal Credit, Jobseeker's Allowance, Employment and Support Allowance, and Housing Benefit.
Ms McCullough also highlighted the more pressing issue of benefits overpayments, which are causing significant distress for claimants. She remarked: "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." When asked about the specifics of the new measures, a DWP spokesperson explained: "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 highlighted another significant issue within the benefits system: the £20billion in benefits that remains unclaimed annually. She said: "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."
