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Advance payment fraud: client as victim

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Andrew Dutton
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This article went chiefly unremarked back in November 2018 -

https://www.thesun.co.uk/news/7658851/benefit-cheats-universal-credit-scam/

‘A source said: “The whole premise of the ‘new claims advance’ system is to help those struggling the most.

“Officials were aware they would be the most at risk while they waited to be set up on universal credit, which can cause delays in people getting money for weeks at a time.

“It’s clear a number of people have targeted the advance system to cruelly exploit that safety net.

“But investigators are more than aware and are ruthlessly tracking these people down”

Guess what? Looks like the crackdown hasn’t worked.

The people scamming the system are loan sharks not claimants - the Sun article doesn’t make this too clear.

It works like this:

Claimant (not on UC) wants a loan and searches around on the internet for a lender
‘Lender’ offers a ‘loan’ but requires personal details and bank details
‘Lender’ then makes a UC claim posing as the claimant - as part of the process ‘lender’ requests an advance payment
Advance is paid
‘Lender’ does a runner
Claimant’s legacy benefits stop while DWP work out what to do

Er…but UC is supposed to be fraud-proof????

Presumably it is easy enough to pretend to be someone else online and you can get round online verification, all you need to do is provide an email address for the 16-digit code, set up the claim, request an advance, get paid, then vanish.

Some more ruthless tracking down is required…..

 

John Birks
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Pete at CAB
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Andrew Dutton - 07 May 2019 03:20 PM

This article went chiefly unremarked back in November 2018 -

https://www.thesun.co.uk/news/7658851/benefit-cheats-universal-credit-scam/

‘A source said: “The whole premise of the ‘new claims advance’ system is to help those struggling the most.

“Officials were aware they would be the most at risk while they waited to be set up on universal credit, which can cause delays in people getting money for weeks at a time.

“It’s clear a number of people have targeted the advance system to cruelly exploit that safety net.

“But investigators are more than aware and are ruthlessly tracking these people down”

Guess what? Looks like the crackdown hasn’t worked.

The people scamming the system are loan sharks not claimants - the Sun article doesn’t make this too clear.

It works like this:

Claimant (not on UC) wants a loan and searches around on the internet for a lender
‘Lender’ offers a ‘loan’ but requires personal details and bank details
‘Lender’ then makes a UC claim posing as the claimant - as part of the process ‘lender’ requests an advance payment
Advance is paid
‘Lender’ does a runner
Claimant’s legacy benefits stop while DWP work out what to do

Er…but UC is supposed to be fraud-proof????

Presumably it is easy enough to pretend to be someone else online and you can get round online verification, all you need to do is provide an email address for the 16-digit code, set up the claim, request an advance, get paid, then vanish.

Some more ruthless tracking down is required…..

 

I may be misremembering this but didn’t something very similar happen with online claims for Tax Credits in about 2006 and the solution used at the time was to end the online claim process? 

 

Andrew Dutton
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‘I may be misremembering this but didn’t something very similar happen with online claims for Tax Credits in about 2006 and the solution used at the time was to end the online claim process? ‘

Yes, ‘twas so with Tax Credits, lots of fraud. DWP has used that as a basis for bragging about the brilliant success of UC.

To me, the scam referred to requires he abolition of the 5-week wait and thus the need for the advances.

This would also have the beneficial effect of people with genuine advance payments not having to pay them back at very high rates.

Jon (CHDCA)
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We’ve heard of this recently in other areas of the country, apparently people are being approached directly by scammers posing as JCP staff, e.g. door-to-door, offering access to ‘low-cost government loans’. I could be wrong, but I think the scam is that the UC claim goes through in the victim’s name, so they do get access to the UC including advance payment, but they are charged an upfront fee, or a cut of the advance payment, for the ‘service’. And of course, may lose out on legacy benefit/transitional protection.

Not much on the general internet about it, but see:
https://www.gentoogroup.com/for-customers/news/2019/april/please-be-alert/

Andrew Dutton
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The gentoo group link indicates that both sorts are happening.

This one was all by phone and the claimant was unaware of the UC claim. Which seems eminently possible if the scammers have obtained sufficient personal information.

andyrichards
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There was also this from yesterday.

https://www.theguardian.com/society/2019/may/07/dwp-slow-response-to-universal-credit-errors-bizarre-says-council

It shows up the advantages of a bit of local knowledge, which is entirely absent from UC processing.

MaggieB
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We had a client last week (and are aware of two others) who was contacted by fraudsters offering her a government “grant”, she basically provided all details to allow the fraudsters to claim UC and verify online. They made the claim and claimed advance,  paid into their account.  First client knew of it was when HB/TCs stopped.  It seems the fraudsters ask a number of questions to establish client is not actually on UC and is getting sufficient HB etc to make it worthwhile before stating claimant is ‘eligible’ for the grant. 
Not sure of the outcome yet as have not been in office this week but clearly client now has a UC claim in her name with the first month’s payment as a recoverable loan..
I am not allowed to type the words (on this forum) to describe these people..

Mike Hughes
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Alerted to a Snapchat version by local DWP who clearly didn’t want it given the oxygen of publicity presumably because there is nothing meaningful in place to prevent it at present. Subsequently believe our service has had at least 1 version of this.

Fundamental system failure. Designed in. Outcome predictable. “Test and learn” I believe the phrase is! Sadly the headlines will still be all about claimant fraud and scroungers rather than a fundamental failure of government and governance.

ClairemHodgson
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surely people affected should be reporting to the police, and getting publicity out there to prevent other people ending up in the same hole.

the fact that the DWP won’t like that is surely neither here nor there!#

but i have to say, i thought people had to go and have an interview to confirm ID before the DWP shelled out?  or is it that the fraudsters are physically impersonating people and taking false documents with them as well?

Mike Hughes
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Our sole interest would be protecting our clients but at the same time there’s a balance to be struck. If there’s no evidence of any process which could currently prevent this then publicising it could trigger further fraud attempts on a wider scale. The other side of that is that widespread publicity might kick some people into gear to actually sort the issue.

Again, not our problem but it’s as well to be aware.

HB Anorak
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ClairemHodgson - 09 May 2019 09:45 AM

surely people affected should be reporting to the police, and getting publicity out there to prevent other people ending up in the same hole.

the fact that the DWP won’t like that is surely neither here nor there!#

but i have to say, i thought people had to go and have an interview to confirm ID before the DWP shelled out?  or is it that the fraudsters are physically impersonating people and taking false documents with them as well?

If you have enough of an online footprint, verification can be dome online in the same session as the claim.  You enter a certain amount of personal information and this is matched with other information held by or accessible to the trusted suppliers who participate in this process (eg the Post Office).  If there is enough of a match, that’s the ID verification complete.  It’s only people without much of a footprint - for example a young non-dep without any utility accounts, credit history - who have to turn up for an interview.  So the fraudsters here are harvesting enough information about a person through the bogus loan application and using it to complete the online verification.

Mike Hughes
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Possibly over-estimating what’s needed for an advance payment. I think our case added non-existent children without difficulty.

Pete at CAB
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HB Anorak - 09 May 2019 10:09 AM
ClairemHodgson - 09 May 2019 09:45 AM

surely people affected should be reporting to the police, and getting publicity out there to prevent other people ending up in the same hole.

the fact that the DWP won’t like that is surely neither here nor there!#

but i have to say, i thought people had to go and have an interview to confirm ID before the DWP shelled out?  or is it that the fraudsters are physically impersonating people and taking false documents with them as well?

If you have enough of an online footprint, verification can be dome online in the same session as the claim.  You enter a certain amount of personal information and this is matched with other information held by or accessible to the trusted suppliers who participate in this process (eg the Post Office).  If there is enough of a match, that’s the ID verification complete.  It’s only people without much of a footprint - for example a young non-dep without any utility accounts, credit history - who have to turn up for an interview.  So the fraudsters here are harvesting enough information about a person through the bogus loan application and using it to complete the online verification.

Would this mean that in the short term the best advice would be to not use ‘verify’ but opt for a face to face id check?

ClairemHodgson
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HB Anorak - 09 May 2019 10:09 AM
ClairemHodgson - 09 May 2019 09:45 AM

surely people affected should be reporting to the police, and getting publicity out there to prevent other people ending up in the same hole.

the fact that the DWP won’t like that is surely neither here nor there!#

but i have to say, i thought people had to go and have an interview to confirm ID before the DWP shelled out?  or is it that the fraudsters are physically impersonating people and taking false documents with them as well?

If you have enough of an online footprint, verification can be dome online in the same session as the claim.  You enter a certain amount of personal information and this is matched with other information held by or accessible to the trusted suppliers who participate in this process (eg the Post Office).  If there is enough of a match, that’s the ID verification complete.  It’s only people without much of a footprint - for example a young non-dep without any utility accounts, credit history - who have to turn up for an interview.  So the fraudsters here are harvesting enough information about a person through the bogus loan application and using it to complete the online verification.

gordon bennett….

Mike Hughes
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Mike Hughes - 09 May 2019 09:13 AM

Sadly the headlines will still be all about claimant fraud and scroungers rather than a fundamental failure of government and governance.

Quoting myself is desperately sad but

https://www.rightsnet.org.uk/welfare-rights/news/item/benefits-overpayments-and-underpayments-increase-to-4.1-billion

Andrew Dutton
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Given that these creeps have found it easy to obtain sufficient personal information from claimants to commit these frauds, and given that many claimants are struggling with online claims, what is to stop them offering ‘services’ which include ‘managing’  the claim for the claimant,  taking their login details and passwords?

People have asked me to take them often enough (a desperation not helped by the obstructive ‘explicit consent’ policy), and the people we’re talking about aren’t nice ethical adviser-types.

If the fraudsters did this, they could presumably:

Change banking details to divert payments
Claim Budgeting Advances
Claim change of circumstances advances
Claim for fake partners and children
Steal arrears payments

I’m picturing them monitoring the claimant’s UC account for lump sums and other low-hanging fruit, and not just stealing once but remaining as a presence on the account for a long time.

Is my imagination running wild or is any of this possible?

Vonny
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Set up a non-existent tenancy and set up an APA

Mike Hughes
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Andrew Dutton - 09 May 2019 11:46 AM

Given that these creeps have found it easy to obtain sufficient personal information from claimants to commit these frauds, and given that many claimants are struggling with online claims, what is to stop them offering ‘services’ which include ‘managing’  the claim for the claimant,  taking their login details and passwords?

People have asked me to take them often enough (a desperation not helped by the obstructive ‘explicit consent’ policy), and the people we’re talking about aren’t nice ethical adviser-types.

If the fraudsters did this, they could presumably:

Change banking details to divert payments
Claim Budgeting Advances
Claim change of circumstances advances
Claim for fake partners and children
Steal arrears payments

I’m picturing them monitoring the claimant’s UC account for lump sums and other low-hanging fruit, and not just stealing once but remaining as a presence on the account for a long time.

Is my imagination running wild or is any of this possible?

A nice summary of exactly why we should not be working with client logins.

Andrew Dutton
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So if I set up as , say, James Moriarty & Co, Financial Advisers and Non-Wealth Management Services, I can persuade vulnerable, confused and frustrated people to part with their logins, I promise will deal with DWP for them, they will get their money (just not all of it) and be relieved of a lot of bother…

And providing they don’t breach the terms and conditions of our agreement (known hereinafter as ‘peaching’) I can skim a little here, claim a little there, and nobody will be any the wiser.

Motionless like a spider in the centre of my web, which has a thousand radiations (and I know well the quiver of each of them) I need do very little and I will go completely undetected.

Parody notwithstanding, this can be done, can’t it? I wonder if DWP has considered what to do.

Andrew Dutton
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Need some help here - is anyone in a position to answer this asap?

Someone whose IS etc has been stopped owing to a fraudulent UC claim by a third party appears to be being lined up by DWP to set up a UC journal and in effect continue that claim.

This strikes me as quite wrong - how can a fraudulent claim be continued, and how can a fraudulent claim not made by the claimant extinguish legacy benefits?

I’m about to raid the Regs to work it out in ‘proper’ language, but if anyone can help quickly I’d be grateful.

Vonny
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Have you got a decent JC+ local partnership person - they may be able to help

Andrew Dutton
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No reply from that quarter

Vonny
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Schedule 2 of the claims and payments regs is interesting
the identity of the sender of any claim is to be presumed, unless the contrary is proved, to be the person whose name is recorded as such on that official computer system

Can your client prove she didn’t make the claim?

Andrew Dutton
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Good grief - Sch 2 part 6.

Claimant has been to police and Action Fraud, but whether or not that constitutes ‘proof’ i know not.

The burden is on the victim!

The fraudsters are going to love this….

Chrissum
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Perhaps a delve into common law is needed. Aren’t actions founded on illegality mainly unenforceable. So arguably the act of closing the legacy benefit is directly linked to an act of criminality (the fraudulent act) and is therefore unenforceable and the remedy should be to place the victim back into the position they would have been in had the criminal act not been undertaken. Or am I ranting from the wrong orifice (as usual?)?

ClairemHodgson
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this all needs publicity - francis ryan would be a good contact?

Andrew Dutton
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latest - DWP insists that client remains on UC, they will not pay until 29/5/19 and will not issue a further advance even though the first was obtained illegally.

Asking MP to raise with SoS.

Vonny
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Your client did not claim UC and therefore is not entitled to it:

SOCIAL SECURITY ADMINISTRATION ACT 1992

PART I - CLAIMS FOR AND PAYMENTS AND GENERAL ADMINISTRATION OF BENEFIT

Necessity of Claim

1.—(1) Except in such cases as may be prescribed, and subject to the following provisions of this section and to section 3 below, no person shall be entitled to any benefit unless, in addition to any other conditions relating to that benefit being satisfied–
(a) he makes a claim for it in the manner, and within the time, prescribed in relation to that benefit by regulations under this Part of this Act; or
(b) he is treated by virtue of such regulations as making a claim for it.

Andrew Dutton
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Yes, I have been looking at that; arguable that as ‘he’ did not make the claim (and nor did anyone with any relevant authorisation to act for ‘him’), it is invalid from first principles?

I’ve asked DWP to provide step by step justification of their decision that it is a valid UC claim - which legislation was engaged and satisfied, and how.

Andrew Dutton
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This case has just been raised in Work & Pensions questions in Parliament.

Justin Tomlinson has offered to look in to it as a matter of urgency.


Watch this space?