The Department for Work and Pensions (DWP) has issued a warning over fraud as people exploit the social security system amid the cost of living crisis.
There has been a rise in scams as people try and take advantage of the economic climate. Pressures are growing on household budgets and winter energy bills are expected to snowball for many and some are attempting to exploit a Universal Credit cash boost loophole.
As Birmingham Live reports, previous scams have seen people able to secure advanced payments of up to £1,500. This has been on occasions of up to three times and a glitch in the application process saw some land several of these DWP loans, despite not being entitled to the money.
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Fraudsters posting as Job Centre staff or personal loan advisors, approached claimants who were looking for extra cash. As payment, the scammers took £500 from every £1,500 secured and then a wave of false claims for advance payments were issued which was widely shared on social media.
A DWP spokesperson said: "The vast majority of claims to Universal Credit are legitimate and fraud and error in the benefits system remains very low, with 96.5 per cent of benefits paid correctly. We continue to monitor and investigate emerging fraud threats and pursue those seeking to rip off the taxpayer using the full range of our powers, including prosecuting and tough financial penalties."
Back in May, the DWP launched a new 'Fighting Fraud in the Welfare System' as it announced that it was investing £613million over the next three years. This will go to bringing in 1,400 more staff to its counter-fraud teams and a new 2,000-strong team dedicated to reviewing existing Universal Credit claims, along with creating new legal powers to investigate potential fraud and punish the perpetrators.
Additionally, it has been announced the the UK government department is working with the new Public Sector Fraud Authority to create a new Fraud Prevention Advisory Group. This will bring together Government and external experts to identify and develop new ways to crack down on scammers as a new £30million Fraud Prevention Fund has been issued to support research, invest in, test and trial creative ways to tackle new and emerging threats.
The DWP said: "Welfare transactions last year totalled £258.2 billion – 22.5 per cent of all UK government spending. This makes the welfare system a target for deliberate fraud by both organised crime groups and opportunistic individuals.
"With the complexity of the operations we run, we also recognise that both claimants and DWP staff can also make mistakes that can lead to payments being made in error. Last year, there was an estimated £6.3 billion of welfare fraud, up from £2.8 billion from the year before. Together with £2.1 billion of error, the combined loss as a result of fraud and error was £8.4 billion or 3.9 per cent of benefit expenditure.
"Last year, there was an estimated £6.3 billion of welfare fraud, up from £2.8 billion from the year before. Together with £2.1 billion of error, the combined loss as a result of fraud and error was £8.4 billion or 3.9 per cent of benefit expenditure."
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