Banks 'refusing' to help DWP with new account checks for benefits claimants

A new law unveiled on Wednesday would allow the Department for Work and Pensions (DWP) to reclaim money from accounts without a court order.
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Banks are OBJECTING to new Department for Work and Pensions ( DWP ) powers which mean they will have to hand over information on claimants. A new law unveiled on Wednesday would allow the Department for Work and Pensions (DWP) to reclaim money from accounts without a court order.

Ministers argue this will speed up the debt recovery process and help contribute to a wider crackdown on benefits fraud. But Daniel Cichocki, director in economic crime and policy strategy at UK Finance, said the plans need to be looked at further to ensure they don't "create risks for vulnerable customers, or conflict with existing regulatory and legal obligations".

Mr Cichocki said he agreed with the principle of going after fraud, but called on the government to introduce controls to "prevent fraud and error entering the benefits system in the first place". The banking industry is also understood to have concerns over new measures forcing them to hand over account information of claimants where there are indications they "may have been" paid benefits incorrectly.

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Big Brother Watch's Silkie Carlo said: “The public and parliament will rightly be very sceptical about empowering the government to go directly into anyone’s bank accounts to take our money and even our driving licenses, least not to target the elderly, disabled and people on the poverty line whose lives could be destroyed by mistaken punishments.

“This is not quite ‘the biggest fraud crackdown in a generation’, but one of the biggest assaults on the welfare system in a generation. It’s part of a wider plan that is turning British welfare into a digital surveillance system, with the government also introducing mass bank spying of the population under the same bill, on the premise of constantly investigating benefits claimants.

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“These are totally unprecedented privacy intrusions and punishments that will do more damage to fundamental British values of fairness and justice than to the serious fraudsters.” Carlo said: “We all want genuine fraudsters to face the law, especially the multi-millionaire tax avoiders and Covid scammers.

“But these extreme powers are not only about fraud but about correcting the government’s own frequent payment errors. We must be extremely cautious about the government creating a second tier justice system reserved for people who rely on welfare that side-steps fair hearings in courts to take away people’s funds and freedoms.”