Universal Credit scams

Universal Credit scams in person and online

You may have seen this story in the press. Residents are being approached by individuals, through doorstep cold calling and outside of Jobcentre Plus offices, offering a “government grant” or “low cost government loans for a small fee”. They get enough information from them to make an initial Universal Credit claim and request an advance payment and keep most or all of it. Residents are unaware they have placed a Universal Credit claim until their existing ‘legacy’ benefit stops, and they have to repay a loan that they did not receive. Those affected have reported being approached by well-dressed persons, carrying what appears to be official ID.

The scam is also taking place on social media.

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Does the claimant have to repay the scammed money?

Justin Tomlinson MP, the Minister of State at the Department for Work and Pensions (DWP), has said in Parliament that “Where it is clear that [claimants] have been a victim of fraud through no fault of their own, no, we would not expect them to pay it back”. The DWP said they would have to if the money went into their account but advisers have reported people being taken to cashpoints and handing the loan over so they don’t receive it.

Can the claimant return to their old ‘legacy’ benefit?

The Minister also said: "... and yes, we would consider putting them back onto the 'legacy' benefits if they were better off under those"

The Department for Work and Pensions (DWP) say:

"The Department is committed to reducing fraud and error and considers information from a range of sources to progress our investigations. We routinely gather intelligence to assist our understanding of anyone seeking to abuse the safety net that Universal Credit offers.  Any exploitation of advance payments is not acceptable, and we are seeking to identify the perpetrators and ensure we take appropriate prosecution action.

We are committed to keeping all Universal Credit services and processes, including advance payments, under review and will make improvements to address any vulnerabilities in the system.

If a claimant has been a victim of a scam, and has not benefited from an advance in any way, they will not be asked to repay it.

Where fraud is committed, the Department takes its responsibility investigate it very seriously, and takes appropriate action.

We are working hard to address the issue of fraudulent UC advance claims and have set up a dedicated team to investigate this specific type of fraud.

We are committed to the use of penalties such as prosecutions and tough financial penalties to discourage this fraudulent behaviour."

What should claimants do?

The DWP advice for people who believe they have been targeted is to contact  ActionFraud on 0300 123 2040. Also call your Jobcentre or DWP office paying your benefit

More help and information

See the Money Advice Service.

If you need advice about money or benefits, please see our webpage Benefit and debt advice services in Newcastle and benefit offices

This page has been written by the City Council's Active Inclusion Service