The Government has admitted that thousands of people who fell victim to a Universal Credit Fraud, might have to be put back on the old benefits system.
It was disclosed this week, tens of millions of pounds is believed to have been stolen by fraudsters, leaving genuine claimants owing hundreds. Criminals have been making bogus claims online possible through a loophole in the online system, whereby the fraudster makes an application and claims advance loans.

Brits can get up to 100 per cent of their advance claim ahead of time to stop them having to wait five weeks for their claim to be processed – but it then has to be paid back over the course of a year.

How does the scam work?

  • The fraudster contacts the claimant and says they can get them a government grant or a payday loan.
  • The claimant hands over their details and the fraudster makes a universal credit application on their behalf, in some occasions the claimant is completely unaware.
  • The Department For Work and Pensions approves the claim and transfers the money into the claimant’s bank account, whereupon the fraudster demands a hefty fee.
  • The scammer takes a large chunk of the cash, and disappears.
  • Because the money is a loan, the petitioner is then owing the entire amount to the DWP.

Often the victim only found out about the fraud when they received a letter from the Department for Work and Pensions to say they were signed up to Universal Credit and that their other existing benefits, such as tax credits, would be stopped. Tens of millions have reported to have been stolen in the scam, the BBC revealed.

Yesterday DWP minister Justin Tomlinson said claimants who had been victims of fraud in Universal Credit fraud might be put back on the old benefits system, and they would not need to repay the cash. He said: “Every individual will be treated individually and we will look at their unique circumstances. Where it is clear they have been a victim of fraud through no fault of their own then, yes, we wouldn’t expect them to be paid back. And yes, we would look at considering putting them back onto the Inheritance benefits if they were better off under those.”

How does universal credit work? 

  • Universal credit combines six “legacy benefits” into one monthly means-tested payment. The legacy benefits are working tax credits, child tax credit, jobseeker’s allowance, income support, employment support allowance and housing benefit.
  • A single universal credit payment is paid directly into the claimant’s bank account each month.
  • More than 1.5m people across Great Britain currently receive benefits through universal credit.
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