The UK government have claimed that the victims of the recent universal credit scam may still be footing the bill for the fraudulent claims. This universal credit scam has been made aware of by the Department for Work and Pensions since November.
The body has been under pressure to provide an effective response to this current situation, due to the fact that the fraudsters typically disguise themselves as a member of the DWP staff in order to obtain the victim’s personal details. Fraudsters would take down personal details and apply for high cost short term loans or micro loans – and fitting the original victim with the bill to pay it off.
The fraudsters would then apply for an advance that was initially set up when it was made aware to the providers of the universal credit that applicants were barely making ends meet when going through the five-week waiting period.
It was found that borrowers were in such desperate need for funds that they had to go to food banks whilst waiting for the loan to come through. Hence the advance was implemented, and has been the area most taken advantage of by these fraudsters.
Although the minister for Work and Pensions Justin Tomlinson has claimed that the “vulnerable people” affected by the scam would be protected, victims would still be expected to repay at least a certain portion of the money back. Justin Tomlinson’s response to a question on the matter during the Commons goes as follows:
“Where it is clear that they have been a victim of fraud through no fault of their own, no, we would not expect them to pay it back.”
Additionally, however, the DWP released a further statement, explaining that victims would have to repay any and all money directly from the universal credit providers that they had kept: “If someone’s details are fraudulently used to claim an advance but they do not themselves receive this payment, we will not recover the money from the claimant.” However, if the victim of this claim did receive some of this advance and kept it, they would be expected to make the repayments for this portion of the loan.
It has been predicted that there are a whopping 42,000 victims from this scam. Tomlinson has called the fraud criminals “parasites” that have been scamming extremely vulnerable people from within the UK’s public.
Reports have suggested a shocking potential of £20 million in losses may have accrued from this scam. Whilst the DWP have queries on these suggested figures, they have made no public comments that offer alternative figures to these reports.
Ironically, it was hoped that universal credit would reduce fraud throughout the UK, however, the National Audit Office (NAO) found that it would do the opposite desired effect, and increase fraud by £1.3 billion in the next six years (by 2025).
National Association of Welfare Rights Advisers Daphne Hall has made public comments on the current issues with universal credit, claiming that “Removing the facility to apply for advance loans online – they should have to be made in person with a jobcentre official – would give a substantial degree of protection.”