National Insurance number fraud

Hi guys

My client tells me that after his wallet was stolen in October 2021, he noticed someone reporting wages to HMRC (NINO information was in the wallet).
From November 2021 his UC was affected by someone’s earnings of around £1,300 pm.
He searched his personal tac account and found out the employer.
He called HMRC, reported it to Action Fraud, DWP fraud helpline- to no avail. This person (seemingly one man self-employment outfit) is still using my client’s NINO.
My client now received HMRC bill for over £10K of income tax.

I am about write to MP (as HMRC’s complaint response deadline expired) but I started to wonder how NINO can be fraudulently used to start with? Is it not connected to a name or date of birth, and if these details don’t much, it won’t work?
I have no idea how NINO can be used fraudulently, so if you have any technical tips, or strategy advice on how to tackle this problem, do let me know.

On a side (should be a separate post really), listen to how UC dealt with it: once persuaded to raise RTI, and accepted client’s story (no mean feat, as we all have been told that RTI is sacred and never wrong, yah?) , client was issued with an underpayment notice. But in the past, because of that fraudulent person’s earnings, my client was issued with an overpayment. So I asked if that overpayment decision can be now superseded. This is the response which has boggled my mind terribly:
“The overpayment was caused when [X] reported earnings
The earnings have now been removed and your original entitlement has been repaid to you. This means you have now received your original entitlement twice for the overpayment period. You were paid the original amount at the time and then when the earnings were removed, you were paid the amount again as part of the underpayment.
The DWP recovery will continue unless you repay the outstanding amount from your original assessment. The overpayment amount has been repaid to you as part of the underpayment you recently received.”

I just don’t get why client was simply not paid the difference between what he was paid when incorrect earnings were in place, and what he should have been paid without those earnings. Instead client was paid “twice”, which created overpayment which is now collected!
Am I missing something?

As for the wider issue, as we discussed here before, I think checking if overpayment or underpayment is correct, is beyond lay person’s ability. I struggle with it- OK, I am not benefit expert but I have been doing this job for 20 years now. It is very wrong if an average claimant cannot work out their entitlement.