We have previously highlighted the issue of fraudsters abusing the availability of the online application process for UC Advance Payments.
In the most disturbing cases, victims have either had their identity stolen, or the fraudsters have posed as officials offering government loans and tricked the victims into providing their identity documents. The fraudsters have then made bogus UC claims and applications for Advance Payments online.
The victims have only become aware of the problem when their legacy benefits subsequently stopped.
The fraudsters have pocketed all or most of the Advance Payment, leaving their victims with an outstanding debt for the Advance and they have been (unknowingly) moved over to UC (which for some claimants gives them less than their legacy benefits).
In September the DWP updated its procedures – UC claimants now have to have their identity checked at a Jobcentre before they can receive a new claim/benefit transfer Advance Payment.
This measure should help to safeguard potential victims, although for genuine claimants, it will mean they need to visit a Jobcentre before they can receive a payment.
What is the latest on this situation?
On 16 October 2019, the Permanent Secretary at the DWP, Peter Schofield, told the Work and Pensions Select Committee that around 85,000 potential Advance Payment fraud cases had been referred to the DWP’s special team for investigation.
He said that, following the change in procedures:
‘We have already seen, almost immediately, a two-thirds reduction in cases referred for fraud. We are going to make further changes later in the year to further clamp down on this……. For an advance to be paid on that element, we will have checked it’.
On 22 October, Guy Opperman, Minister for Pensions and Financial Inclusion confirmed that:
'There are 28 individual cases being prepared for prosecution and 1 successful individual prosecution. There has been1 successful third party prosecution and a 2nd third party case is due in court next month'.
Can victims be moved back onto legacy benefits?
Peter Schofield stated:
‘In the event of someone whose details, for example, have been stolen and someone has made a claim on their behalf that they have had no involvement in whatsoever—they have just realised that it has happened—or if there is a situation where someone would lose the severe disability premium, in those cases we would work with them, looking at whether moving them back to legacy is the right thing to do. Some people are better off staying on universal credit, but where they are better off moving to legacy, that is what we would do.’
Do victims have to repay the advance?
On this matter, Peter Schofield explained:
'Someone might have had an advance of £700, of which the fraudster took £500 and they received £200. In that case, we would treat the £200 as if it were a normal advance; we would not ask for the £500 back.'
UC claimants can receive an Advance of up to 100% of their likely award based on the information about their situation as presented on the claim - and as long as they are able to re-pay it within 12 months - there is no other check made. This has meant that some of the scammers have made up additional facts about the claimant in order to maximise the Advance amount eg we have heard of a case where a 19 year old claimant had six blind dependent children.
In the future only Elements that have been verified by the DWP will be included when working out the claimant's maximum Advance.