Government and Credit
Reference Agency work together to stop £800m benefit fraud and error
Benefit cheats are
being warned that Government will work with a credit reference
agency (CRA) to track down fraudsters across the country.
HMRC and DWP are delivering on the Prime Minister’s commitment to
draw on the expertise of credit reference agencies (CRAs) to
tackle fraud and error. The Departments have signed a twelve month
contract with Experian to help drive down unacceptably high levels
of tax credit and benefit fraud and error.
HMRC and DWP will work with Experian to identify undisclosed
partners and income – all of which affect how much money claimants
are entitled to receive.
A recent pilot of this work has already protected more than £16m
of anticipated losses in tax credits.
The first cases identified by Experian as part of this work
are already with fraud investigators. Using the Experian data, the
departments expect to save around £800m over life of the contract.
Exchequer Secretary to the Treasury, David Gauke, said:
“I’m delighted that following a very successful pilot we are able
to take forward a partnership which will work in the interests of
all honest taxpayers and benefit recipients.
“The Government will not tolerate people who dishonestly divert
money away from those who are genuinely entitled to it.
“Working with Experian will allow HMRC to escalate the fight
against tax credit fraudsters, helping to ensure that they are
caught and punished.”
Minister for Welfare Reform, Lord Freud, said:
“Benefit fraud is a crime and we are committed to stamping it
“We will catch and punish those who abuse the system and prevent
fraud from entering in the first place.
”Alongside this work at the frontline, we are bringing in the
Universal Credit which will simplify and automate the benefits
system. This will make it much easier to catch people who make
Notes for editors
studies of tax credits claimants caught by the CRA pilot are
attached to this release here: http://nds.coi.gov.uk/Content/Detail.aspx?ReleaseID=422347&NewsAreaID=2&ClientID=257
2. By working with Experian, HMRC expects to save £700
million over the life of the contract, DWP expects to save £100
million over the same period.
3. Experian is a global
information services company, and the largest credit reference
agency in the UK. The contract was signed on 2 December.
October 2010 HMRC and DWP launched their joint strategy to tackle
fraud and error across the benefit and tax credits regimes. The
joint strategy is based upon five key components that together
address the causes of fraud and error.
5. All DWP means
tested benefits fall under the scope of this work - Jobseekers
Allowance, Employment and Support Allowance, Income Support,
Pension Credit and Housing Benefit (except for Standard Working
age claimants which is covered by a separate contract also with
Experian and now in its second year). The CRA data matching work
will target £770m worth of overpayments lost to undeclared
partners and/or income.
6. In May 2011, the Chancellor
announced that more than £1 billion of fraudulent and incorrect
tax credit payments were stopped by HMRC in 2010/11. More
information here: http://nds.coi.gov.uk/clientmicrosite/Content/Detail.aspx?ClientId=257&NewsAreaId=2&ReleaseID=419423&SubjectId=36
7. In October 2010 the Cabinet Office established the Counter
Fraud Taskforce, which is chaired by Francis Maude, Minister for
the Cabinet Office. It is made up of senior officials from
government and private sector with expertise in tackling fraud,
error and debt. Officials from the National Fraud Authority (an
Executive Agency of the Home Office) provide the secretariat to
8. This Taskforce has overseen eight pilots in
different Government departments using the latest technology to
tackle fraud in the public sector:
o HMRC: £256 million over
4 years by using data analytical techniques to screen tax credit
applications before payments are made
o HMRC: £700 million
using credit reference agency, and existing HMRC and DWP data, to
detect undisclosed partners
o DWP: £490 million over 4 years
using credit reference agency data to detect undisclosed partners
and undeclared income.
9. Follow HMRC on Twitter @HMRCgovuk
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