New powers are being introduced to recover money from people paid by mistake through fraudulent claims
Security experts are calling for better identity checks for benefit claimants as new anti-fraud powers come in. New laws were recently approved providing a suite of extra powers to help DWP officials clamp down on fraud and wrongful payments in the benefit systems.
The new measures include measures to stop or recover erroneous payments. This includes a new power to directly take an owed amount from a person’s bank account, if they have a debt and are refusing to pay it back. The person will be given advance notice and a chance to dispute the matter before the funds are deducted. Bank providers will also be required to look over the details of bank accounts that they provide that are linked to certain benefits.
They will be tasked with flagging up any accounts that may not be eligible for their payments, and then passing on their details to the DWP for further investigation. These powers will initially be used to look at accounts linked to Pension Credit, Employment and Support Allowance, and Universal Credit.
But now experts in the security verification field say that the DWP should look at bringing in better initial checks, rather than trying to claw back payments. Phil Cotter, CEO at compliance checks group SmartSearch, said: “Preventing fraud and error requires investment in better verification upfront, not just stronger enforcement after the fact. A strong digital identity system, designed from the outset to protect people’s privacy, could significantly reduce fraud and administrative errors by making sure people are correctly identified from the start.”
The DWP claims that the new powers will save the taxpayer £2.1billion over the next five years. Mr Cotter said that more data sharing could help further reduce overpayments. He said: “In a benefits context, combining real-time HMRC or payroll data with departmental data matching would help identify issues earlier and reduce costly overpayments.”
The expert said that wrongful payments are often caused by errors from the DWP, rather than claimants getting things wrong. Mr Cotter said: “The DWP needs better systems, better data integration and clearer processes; placing more burden or suspicion on claimants is not the right approach.”
A useful tool
Looking at the new bank account eligibility checks, Mr Cotter said these may well be an “incredibly useful tool” for identifying incorrect payments. The legislation also outlines that these checks could be expanded to other benefits.
But Mr Cotter added a word of caution that more information is needed on top of this, to be sure a claimant is being wrongly paid their benefits. He said: “Acting on information from a bank account check alone could easily lead to false positives if taken out of context.
“The most effective use would be to use bank account checks alongside other checks, for example, on cases already flagged by multiple risk indicators. This would include things like identity inconsistencies, links to multiple accounts, or patterns associated with organised fraud.
“If you combine bank data with good digital identity verification and solid cross-checks with HMRC, DWP and other Government data, you get a much clearer picture of eligibility, without wrongfully identifying legitimate claimants in the process.” The DWP provided a response.
DWP response
A DWP spokesperson said: “Our reforms will ensure people are paid the correct benefits and overpayments are recovered, and are supported by the effective use of data to minimise the risk of fraud and error. The powers in the Fraud, Error and Recovery Act have numerous safeguards and will be independently overseen.
“We are forecasting an ambitious reduction in fraud and error levels to 2.8 percent by 2028/29, the lowest level since tax credits were introduced in 2003/4.” When the legislation was put on the statute books in December 2025, DWP minister Andrew Western said: “It is right that as fraud against the public sector evolves, the Government has a robust and resolute response.
“The powers granted through the bill will allow us to better identify, prevent and deter fraud and error, and enable the better recovery of debt owed to the taxpayer. A benefits system people can trust is essential for claimants and taxpayers alike – through this bill that’s exactly what we’ll deliver.”
