10,000 ‘innocent' benefits claimants could have bank accounts wrongly checked by DWP, MP warns

Yahoo

30-04-2025

Thousands of people could be wrongly implicated for benefit fraud offences under government reforms that will see the Department for Work and Pensions (DWP) recover money directly from claimants' bank accounts, an MP has warned.
Former Tory minister David Davis is among a number of MPs to raise concerns about the scope and accuracy of the technology used to enforce the government's Fraud, Error and Recovery Bill, which will give the government the power to investigate benefit claimants' bank accounts by legally compelling banks to share account data, and take overdue payments.
The government and banks will use an algorithm to detect potential fraudsters, as well as to recover money directly from the bank accounts of people accused of committing benefit fraud. In serious cases, the government will suspend people's driving licences.
But with an algorithm error margin of just 1%, at least 10,000 innocent people will be "dragged through the system", Davis warned.
"If the banks use algorithms, they will have an error rate of at least 1%. That means 10,000 or more innocent people will be dragged through the system by this proposal," Davis said.
The bank account spying powers in today's Public Authorities (Fraud, Error and Recovery) Bill amount to a suspicionless surveillance tool impacting over 9 million innocent people's bank accounts.The Government must think again.I made this point today in the @HouseofCommons 👇🏻 pic.twitter.com/HTQkhrHiXa
— David Davis MP (@DavidDavisMP) April 29, 2025
He added: "Big Brother Watch, Age UK and a multitude of other charities have highlighted concerns about the bill, such as the breakdown in trust that it could cause and the risk of amplifying the challenges faced by people with disabilities."
Big Brother Watch told Yahoo News that "recruiting banks to investigate benefits recipients on behalf of the state for administrative error is an intrusive overreach."
Jasleen Chaggar, legal and policy officer at Big Brother Watch, said: "This law undermines the presumption of innocence and treats people as suspects by default."
"The use of algorithmic software to snoop on everyone's bank accounts will inevitably lead to devastating errors which will disproportionately impact elderly people, disabled people, carers, single parents and the poorest in our society."
"Despite 25 civil society groups and 237,775 members of the public calling on parliament to drop the mass bank spying powers, the government is still pushing ahead. It will now be up to the House of Lords to challenge the harmful and rights-eroding provisions in this bill."
Labour MP Neil Duncan-Jordan warned that a misuse of the technology could lead to another "Horizon-type scandal", referring to the error-ridden technology that saw hundreds of Post Office staff wrongly accused and convicted of fraud and false accounting.
Responding to Davis's remarks, Duncan-Jordan said: "The right honourable member brings me to my next point, which is the risk of a Horizon-style scandal on a massive scale, given the sheer volume of accounts that will be scanned.
"That is glaringly obvious."
The Labour MP for Poole proposed limiting the powers of the bill to when a welfare recipient is suspected of wrongdoing and not of error, adding that the benefits system "lends itself to errors" as it is "extremely difficult to navigate".
"Analysis of the bill has shown that where assessment deems that a financial deduction would cause hardship, the debtor can face losing their licence. That is not justice in my view, but a penalty for being poor," Duncan-Jones said.
"Our welfare state needs to provide support for those who need it, and the change that we promised as a government must lead to a more compassionate and caring society – one that enables rather than penalises.
"These are the values that make us different from the last government, and we should not forget that."
Fellow Labour MP and former shadow chancellor John McDonnell added: "Time and again, when we have introduced legislation like this in the past that has short-circuited the traditional protective constitutional and legal mechanisms, it has led to debacles and miscarriages.
"I warn ministers that that is exactly what we are facing here. Reference has been made to issues with regard to the use of computers, models and algorithms. We seem to have learned nothing from where we have made those errors."
Work and pensions spokesperson for the Liberal Democrats, Steve Darling, branded the legislation "Orwellian", and said that the government needs to publish a best-practice document to give claimants' peace of mind.
The government said the bill, which has now progressed to the House of Lords, could recover £1.5bn over the next five years by "targeting the bank accounts of fraudsters who can repay but are wilfully gaming the system".
It will also appoint an annual reviewer to look at the bill.
However, Darling said that as the government is allowed to appoint its own reviewer, it defeats the object of the inspection.
"We do not welcome the secretary of state effectively marking their own homework by making the appointment themselves," he added.
The government has been approached for comment.