The measures are aimed at stopping bogus claims or making incorrect payments
The DWP has been given new powers to check people’s bank account details(Image: Getty)
Security experts are calling for stronger identity verification checks for benefit claimants as new anti-fraud powers take effect. New legislation was recently passed granting a range of additional powers to assist DWP officials in tackling fraud and incorrect payments within the benefit system.
The new measures include provisions to stop or reclaim erroneous payments. This includes a new power to directly withdraw an owed sum from a person’s bank account if they have a debt and are refusing to repay it.
The person will receive advance notification and an opportunity to challenge the matter before the funds are withdrawn. Banking providers will also be obliged to review the details of bank accounts they provide that are connected to certain benefits.
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The DWP will ask them to identify any accounts that may not be entitled to their payments, and subsequently forward their details to the DWP for further investigation. These powers will initially be used to check over accounts connected to Pension Credit, Employment and Support Allowance, and Universal Credit.
However, specialists in the security checks sector are making the case that the DWP ought to introduce more robust initial checks, rather than attempting to recover payments that have gone out. Phil Cotter, CEO at compliance checks group SmartSearch, said: “Preventing fraud and error requires investment in better verification upfront, not just stronger enforcement after the fact.
“A strong digital identity system, designed from the outset to protect people’s privacy, could significantly reduce fraud and administrative errors by making sure people are correctly identified from the start.” The DWP is predicting that the new powers will save taxpayers £2.1billion over the next five years.
The DWP has been granted new powers to request bank account data(Image: Getty)
Mr Cotter said that better data sharing could help further reduce overpayments. He said: “In a benefits context, combining real-time HMRC or payroll data with departmental data matching would help identify issues earlier and reduce costly overpayments.”
The specialist noted that erroneous payments are frequently caused by mistakes from the DWP, rather than claimants getting things wrong. Mr Cotter said: “The DWP needs better systems, better data integration and clearer processes; placing more burden or suspicion on claimants is not the right approach.”
Regarding the new bank account eligibility checks, Mr Cotter suggested these may prove an “incredibly useful tool” for identifying wrongful payments. The legislation also indicates that these checks could be extended to other benefits.
But Mr Cotter added a word of caution that additional information is required on top of this to be certain a claimant is being incorrectly paid their benefits. He said: “Acting on information from a bank account check alone could easily lead to false positives if taken out of context.
“The most effective use would be to use bank account checks alongside other checks, for example, on cases already flagged by multiple risk indicators. This would include things like identity inconsistencies, links to multiple accounts, or patterns associated with organised fraud.
“If you combine bank data with good digital identity verification and solid cross-checks with HMRC, DWP and other government data, you get a much clearer picture of eligibility, without wrongfully identifying legitimate claimants in the process.” The DWP provided a response.
DWP response
A DWP spokesperson said: “Our 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. The powers in the Fraud, Error and Recovery Act have numerous safeguards and will be independently overseen.
“We are forecasting an ambitious reduction in fraud and error levels to 2.8 percent by 2028/29, the lowest level since tax credits were introduced in 2003/4.” When the legislation was put into law back in December 2025, DWP minister Andrew Western said: “It is right that as fraud against the public sector evolves, the Government has a robust and resolute response.
“The powers granted through the bill will allow us to better identify, prevent and deter fraud and error, and enable the better recovery of debt owed to the taxpayer. A benefits system people can trust is essential for claimants and taxpayers alike – through this bill that’s exactly what we’ll deliver.”
