Credit Firms Given Wider Role To Help Tackle Benefit Fraud

by Samuel Gooch - Date: 2010-08-29 - Word Count: 345 Share This!

Prime minister David Cameron plans to outline a new scheme that will see credit rating firms set for a larger role in tackling the 5.2bn annual cost of benefit cheats and overpayments.

Experian, one of the main Credit rating firms, said it was currently in talks with ministers to strike a deal which could see it paid on a commission-style basis, with payment reflecting the number of cheats it uncovers.

Credit rating firms like Experian monitor consumer's spending patterns that relate to credit such as utility bills and purchases made using credit cards.

Mr Cameron will also be outlining plans to roll out tougher penalties and more convictions.

Experian said it was already working on a contract to scrutinise new housing benefit claimants, in a deal that was previously agreed when Labour were in power which had saved 17m.

It added that it could take on a wider commitment allowing it to examine claims for other benefits across the UK.

The company said it would be able to save 1bn if "simple cost-effective and proven fraud prevention techniques" were utilized across the public sector.

Work and Pensions Minister Chris Grayling said credit agencies kept "extensive data" which could be used in the fight against benefit fraud.

He told BBC Radio 4's Today programme: "The whole point is that we are introducing, across a number of government activities, payment by results.

"Government should pay people - outside organisations - when they get the job done."

Mr Grayling added: "Why should government not use the same tools that are available to independent organisations?"

The PM said the 1.5bn lost every year as a result of benefit fraud must be tackled.

Writing in the Manchester Evening News, he said: "At a time when we're having to take such difficult decisions about how to cut back without damaging the things that matter the most, we should strain every sinew to cut error, waste and fraud in our welfare system.

"Welfare and tax credit fraud and error costs the taxpayer 5.2bn a year. That's the cost of more than 200 secondary schools or over 150,000 nurses.

"It's absolutely outrageous and we can not stand for it."

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