Over the last year, Universal Credit has been a lifeline for millions of UK citizens who have become unemployed or had their incomes reduced as a result of Covid-19.
However, official figures show that cases of fraud and error have reached all-time highs in the past year. This is on the back of the government relaxing normal checks to accommodate the influx of new applicants. Let’s take a look at what’s been happening and how you can yourself from Universal Credit fraud.
Increase in Universal Credit fraud and error: what are the figures?
Data from the Department for Work and Pensions (DWP) shows that £8.4 billion was lost in 2021-21 through Universal Credit fraud and error. This is nearly double the previous year’s already eye-watering figure of £4.6 billion.
According to officials, this significant increase is almost entirely due to fraud. According to the DWP, Universal Credit fraud alone increased by more than half in the last year to hit 14.5%.
Overall, fraud and error across the benefits system went up by almost two-thirds to 3.9%, compared to 2.4% the previous year. This is the highest rate on record.
Why has Universal Credit fraud increased?
Officials believe that the increase in Universal Credit fraud is due to more people applying for benefits and the value of each case of fraud increasing, rather than an increase in the proportion of people committing fraud. Since the start of the pandemic, the number of people on Universal Credit has doubled to six million.
Many fraud cases involve people claiming more than they’re entitled to by falsifying details such as the cost of their rent.
Others involve identity theft, where criminal gangs use people’s personal information to apply for Universal Credit advance payments. In fact, criminals capitalised on the relaxation of welfare rules last year to steal up to £1.5 billion, according to the BBC.
During the pandemic, the government has been processing identity checks online rather than in person. Some information from applicants is also being taken on faith without any confirmation.
Despite an increase in fraud and error in the benefits system, the vast majority of claims remain valid. According to a DWP spokesperson, more than 95% of benefits are still being paid correctly.
How are criminals targeting Universal Credit?
One common Universal Credit scam involves criminals targeting people with an offer to help them apply for a ‘low-cost loan’ or ‘free government grant’ for a fee. In reality, the money is actually an advance payment of Universal Credit. This is essentially a loan that will have to be paid back.
When people give out their details, criminals use them to make an application for the advance payment. After taking their ‘fee’, the victims are then left with a relatively hefty amount to pay back to the government.
How can I protect myself from Universal Credit fraud?
If you’re on Universal Credit, you can protect yourself by never sharing your personal information with someone you don’t trust.
Of course, there are other circumstances in which criminals may gain access to your information without directly contacting you. They may use methods such as online phishing, hacking and even going through your rubbish.
Here are a few tips for keeping your information from falling into the wrong hands and being used for Universal Credit fraud and other forms of identity fraud:
- Don’t share personal information such as your phone number or home address on social media.
- Avoid clicking unfamiliar attachments in emails.
- Limit your online shopping to legitimate sites.
- Shred all documents that might contain your personal information before disposing of them.
- Create strong passwords for your online accounts.
- Protect your devices with up-to-date security software.
- Be careful when using public Wi-Fi, especially when surfing sites that might contain your personal information.
If you have been a victim of Universal Credit fraud, you can report it to Action Fraud through their online reporting tool. You can also call them on 0300 123 2040.
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