Bogus Universal Credit claims rake in millions

Fraudsters have ripped off the government’s flagship Universal Credit benefit scheme for an estimated £20 million by making bogus applications.

But, worse still, their fake claims were matched up to real benefits claimants who have found themselves thousands of pounds in debt through no fault of their own.

Loophole

The scammers have been taking advantage of a loophole in the online application process for migrating a person on normal benefits to the new Universal Credit system.

The new system is being introduced to replace six existing benefit categories – Job Seeker’s Allowance, housing benefit, children’s tax credit, working tax credit, income support and employment and support allowance.

Fraudulent applications

Most recipients have been switched by benefits officers, but individuals can make their own application to convert online.

The scammers have been making fraudulent applications in the names of real claimants and asking for advance loans meant to tide over applicants until their regular benefit payment kicks in.

But the first thing the unsuspecting claimants know is that their existing benefits have been stopped and they are being asked to pay back a loan they never had.

Entries

Later examination of the false applications has revealed entries like one man saying England soccer star Harry Kane was his landlord and a 19 year old mother was claiming for her six blind children!

The fraud was revealed on an internal forum for Department for Work & Pensions (DWP) staff which claimed the scam was ‘rife’ in the north of England.

200-300 referrals a day

One member of staff said between 200 and 300 new referrals a day were being highlighted at a cost of between £1,200 and £1,500 per advance.

More than £100,000 of fraudulent activity has been recorded at one branch with another saying more than a third of all claims being processed were ‘suspicious’.

Twist

In another twist, fraudsters are posing as Job Centre staff and charging as much as £1,000 to set up what is actually a free service for the claimant.

Jade Thomas (31) from Manchester now owes £1,525 to the DWP after paying a fraudster £1,000 to set up a loan for her.

Badge

She said: “He had a badge from the Job Centre Plus. He was dressed smartly.

He said all he needed was my provisional licence and my bank card and a photo which he had to take there and then.”

Jade believed the money was some form of grant and it was only when just £535 arrived in her bank account that she realised she had been duped.

Now she has just 12 months to pay back the whole of the amount and has been pushed into arrears with both her rent and council tax.

Fraud and error

Commenting on the scam, Work and Pensions minister Baroness Buscombe said: “Fraud and error in the benefit system remains low and we continue to work hard to identify and tackle any instances that occur.

“Those involved in the despicable practice of preying on vulnerable people to steal their benefits are parasites, and we are determined to bring them to justice.

Instincts

“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.

“Treat your personal information for benefits in the same way you would for your bank.

And if you think you’ve been targeted, we urge you to report it urgently.”

Full extent

MP Frank Field, chairman of the Works and Pensions Select Committee, has written to senior civil servants demanding to know the full extent of the scam, what plans the department has to tackle it and what protections will be put in place for victims.

The letter said: “Even when the department is informed that a claim for universal credit was fraudulent and made without the claimant’s knowledge or consent, it seems that claimants are being prevented from returning to their legacy benefits – even if they are worse off on universal credit.”