“Universal Credit is an expensive, badly organised, error-strewn, easy to defraud shambles.”
– UC Diary.

Defrauding Universal Credit has always been easy. Yet organised crime hasn’t been involved. Until now.

UC Diary has never been specific about how fraud could be committed. To do so would be irresponsible. However, the details below are already in the public domain and given that no official warning is being given to potential victims, publishing seems justified.

The DWP is currently receiving phone calls from those whose legacy benefits have been closed because of a claim to Universal Credit. (Those benefits include Job Seekers Allowance, Employment and Support Allowance, Income Support etc.)

Routine stuff you might think, except that those people haven’t claimed Universal Credit. Claims have been made on their behalf, fraudulently by others. Once the claim has been made, new claim or benefit transfer advances have been obtained. If identify and bank details can be verified online, then those advances can be applied for without even visiting a job centre.

The amounts available are significant. For a claimant over the age of 25, with two children and declared rent of £700 a month, the advance available would be £1526.57. This amount would be repaid over 12 months from benefits. The advance can be obtained before it’s been established that the children, or the rent exists.

Potteries Gold, part of Citizens Advice Staffordshire North & Stoke, has warned that smartly dressed scammers, are operating in the Derbyshire and Merseyside areas, offering interest free loans and quick cash, in return for a fee.
Victims have been targeted in pubs and sometimes door to door, and the perpetrators often claim to be DWP staff who are helping to set up claims.

This is likely to be the tip of the iceberg. Calls have been made to the DWP because of letters received stating that legacy benefits have closed. It would be entirely possible to scam someone who wasn’t in receipt of benefits at all. The first they would know is when they get a letter from UC debt management, asking for the money back, which could be months after the offence was committed.

Abuse of the advance system is not new. Those in the know have repeatedly opened new claims, received an advance and then closed the claim, or not shown up for an initial interview. Measures to combat this were only put in place in June 2018. The advance can still be given, but there is an additional screen with details of previous advances so that staff can make an informed decision.

The problem was exacerbated in February 2018, when the amount available for a new claim advance was increased to a full month’s entitlement, having previously been half that. It’s not the first time that a sticking plaster solution, has resulted in a more grievous injury later on.