{"id":117547,"date":"2026-02-15T09:00:00","date_gmt":"2026-02-15T09:00:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=117547"},"modified":"2026-02-15T08:30:52","modified_gmt":"2026-02-15T08:30:52","slug":"dwp-targets-benefit-fraud-bank-monitoring","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/dwp-targets-benefit-fraud-bank-monitoring\/","title":{"rendered":"DWP Targets Benefit Fraud with Sweeping New Bank Monitoring Rules"},"content":{"rendered":"\n

The reforms form part of a wider effort to reduce fraud and error across the benefits system. According to reporting by Nicholas Dawson<\/strong>, the government forecasts that the changes will save taxpayers \u00a32.1<\/strong> billion over the next five years.<\/p>\n\n\n\n

The legislation, approved in December 2025 under the Fraud, Error and Recovery Act, grants officials a suite of enforcement tools. These include powers to stop or recover incorrect payments and to require banks to review accounts linked to certain benefits. The initiative will initially focus on accounts associated with Pension Credit, Employment and Support Allowance, and Universal Credit.<\/p>\n\n\n\n

Security specialists have welcomed efforts to tackle fraud but argue that prevention should begin earlier in the process. Phil Cotter<\/a><\/strong>, chief executive of compliance checks group SmartSearch, said that stronger identity verification at the outset would reduce the need for enforcement measures later.<\/p>\n\n\n\n

Direct Recovery Powers and Expanded Bank Account Checks<\/strong><\/h2>\n\n\n\n

Under the new rules, the DWP can directly recover debt from a claimant\u2019s bank account if money is owed and repayment has been refused. Individuals must be given advance notice <\/strong>and the chance to challenge the decision before any deduction is made.<\/p>\n\n\n\n

Bank providers will also be required to examine account details connected to specified benefits <\/a>and flag accounts that may not meet eligibility criteria. These details can then be passed to the DWP for investigation. The legislation allows for the possibility that such checks could be extended to other benefits in future.<\/p>\n\n\n\n

A spokesperson for the department said the reforms are supported by safeguards and will be independently overseen. \u201cOur 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<\/em>,\u201d the spokesperson stated.<\/p>\n\n\n\n

When the legislation was placed on the statute books, DWP minister <\/strong>Andrew Western<\/strong> <\/a>said the government needed a \u201crobust and resolute response<\/em>\u201d as fraud against the public sector evolves. According to Mr Western, the new powers will help identify, prevent and deter fraud and error, while improving debt recovery.<\/p>\n\n\n\n

The department has forecast a reduction in fraud and error levels to 2.8 per cent by 2028\/29, which it describes as the lowest level since tax credits were introduced in 2003\/4.<\/p>\n\n\n\n

Calls for Stronger Verification at the Outset<\/strong><\/h2>\n\n\n\n

While describing bank account eligibility checks as potentially \u201can incredibly useful tool\u201d, Mr Cotter cautioned that relying on such data in isolation could lead to false positives. Acting solely on information from a bank account check, he said, could misidentify legitimate claimants if the context is incomplete.<\/p>\n\n\n\n

He argued that the most effective approach would combine bank data with other risk indicators, such as identity inconsistencies<\/strong>, links to multiple accounts<\/strong>, or patterns associated with organised fraud. According to Mr Cotter, integrating real-time HMRC or payroll data with departmental data matching would help identify issues earlier and reduce overpayments.<\/p>\n\n\n\n

Mr Cotter also suggested that wrongful payments are often the result of administrative errors rather than claimant misconduct. \u201cThe DWP needs better systems, better data integration and clearer processes; placing more burden or suspicion on claimants is not the right approach<\/em>,\u201d he said. The debate now centres on whether enforcement powers alone will deliver lasting savings, or whether investment in digital identity systems and cross-departmental data sharing will prove more effective in preventing errors before money leaves the public purse.<\/p>\n","protected":false},"excerpt":{"rendered":"

The DWP has introduced new powers designed to recover money paid out through fraudulent or erroneous benefit claims. The measures include the ability to deduct funds directly from a debtor\u2019s bank account, following advance notice and an opportunity to dispute the action.<\/p>\n","protected":false},"author":10,"featured_media":117549,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":["post-117547","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/117547","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=117547"}],"version-history":[{"count":1,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/117547\/revisions"}],"predecessor-version":[{"id":117548,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/117547\/revisions\/117548"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/117549"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=117547"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=117547"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=117547"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}