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Universal credit scam ‘leaves claimants up to £1,500 out of pocket’

DWP called on to act after tens of millions of pounds reportedly stolen by fraudsters

Tens of millions of pounds have reportedly been stolen by fraudsters as a result of a universal credit scam that has left affected claimants up to £1,500 out of pocket.

The Department for Work and Pensions (DWP) is under to pressure to explain what it intends to do to counter a scam in which criminals obtain claimants’ personal details, often by posing as DWP staff, to make bogus online applications for universal credit.

According to a BBC report, contributors to an internal DWP staff forum estimate the losses so far could amount to as much as £20m, with hundreds of bogus claims every day for advance loans of up to £1,500. The DWP said it questioned the figures, but could not say if it had different estimates.

Once the claim is established the scammers can apply for, and take a cut of, an advance loan of hundreds of pounds routinely offered to new claimants to get them through the minimum five-week wait for a first payment.

In other cases in which claimants’ details are obtained without consent, the first the claimant becomes aware of the scam is when they receive a letter from the DWP telling them their existing benefits have been cancelled, their universal credit claim has opened and they must repay the advance loan.

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