Credit referencing agencies to get role in fraud crackdown

Credit referencing agencies could have a significant role to play in cracking down on benefit fraud, the Prime Minister announced today.

At an event in Manchester David Cameron said: “Private companies use all sorts of different means to make sure they are not defrauded. Why should the state be any different?”

The PM’s comments came amid reports that one of the leading agencies, Experian, is in talks about a deal that would see it rewarded for the benefits cheats it uncovers.

In a letter published in the Manchester Evening News, Cameron revealed that a number of options were under consideration as part of the crackdown.

He said: “Tougher penalties for fraud, more prosecutions, encouraging those who know fraud is taking place to come forwards and making greater efforts to reclaim money that’s wrongly paid.

“We will look at all these things and more. Including, for example, using more information from third parties such as credit referencing agencies to identify circumstances which are incompatible with the benefit claim.”

The PM wrote that it was “absolutely outrageous” that welfare and tax credit fraud and error costs the taxpayer £5.2bn a year.

He added: “We need to do more to stop fraud. £1.5bn of hard earned taxpayers’ money is being stolen from the taxpayer. This is simply not acceptable.

“Nor is it right that only £20m of benefit fraud-related debts are recovered each year. Or that three in four of those caught don’t get prosecuted.”

Full details of the plan are likely to be unveiled by the Work and Pensions Secretary, Iain Duncan Smith, in the autumn.