Planning & Budgeting

Fraud victims facing pay deductions

· 3 min read

The Department for Work and Pensions (DWP) has sent letters to thousands of people demanding repayments of benefits. However, many of these people haven’t claimed or received the benefits DWP claims, having been a victim of fraud. To add to the stress, several fraud victims have noticed that employers have taken the money out of their salaries.


The Department for Work and Pensions (DWP) has sent letters to thousands of people demanding repayments of benefits. However, many of these people haven’t claimed or received the benefits DWP claims, having been a victim of fraud. To add to the stress, several fraud victims have noticed that employers have taken the money out of their salaries.

Criminal gangs have been using people's details and using them to apply for advanced payments of universal credit fraudulently. Many of these claims took place when the coronavirus pandemic halted face-to-face interviews for claims. The change in application format opened a door for gangs to commit such fraud on a significant scale.

The gangs receive the payments, leaving the fraud victim dealing with the fallout. Advance payments help those applicants who can't wait for the end of the general six-week waiting period, and they act as a form of a loan. Once the universal credit application is approved, the advance payment amount is recouped from the benefit payments. If the application is not approved, the person has to pay back the sum through other means. DWP will seek repayment of the advance payments from the fraud victim, not realising they have been a victim of a fraud. 

DWP has contacted thousands of people demanding repayments. If the person doesn’t comply with the request, DWP can instruct employers to deduct the money directly from salaries. Several cases involve repayments of over £1,000. These salary deductions have hit fraud victims hard at a time that's already stressful for most people. Employers often comply with DWP because failure to do so could result in fines of up to £1,000. 

Struggling to contact the DWP

Victims are also struggling to connect with the DWP to deal with the issue. The BBC reported several people had had trouble contacting DWP, often spending hours waiting to get through. 

One fraud victim called Jo said the DWP didn’t listen to her concerns and later went on to instruct her employer to deduct money from her salary. Jo told BBC’s Money Box radio show the situation was “upsetting because it felt they hadn’t taken on my concerns regarding the fraud.” Another person talked about their struggle to report the fraud online. 

Fraud costing the government a lot of money 

The problem of identity fraud is widespread. The DWP set up a Stolen Identity team earlier this year to tackle the issue head-on. But the team isn’t working as intended, and the issue is causing serious concern for the government. In March, the National Audit Office reported that the problem could have cost the government up to £150 million. In May, the Express reported Universal Credit fraud could have cost even more, with the government losing close to £1.5 billion. For fraud victims, the situation is not just about salary deductions but also about the emotional toll and time it takes to clear the issue.

If you suspect you might have been a victim of this kind of fraud, the DWP is requesting you call 0800 916 0647.

What to read next...
Krista Lomu
Krista Lomu
Krista has been writing about finance for nearly a decade. Based in London, she hopes to turn even the most complicated topics to approachable and interesting for readers. When she's not writing and working with small businesses, she likes to read, watch football and play games - fuelled on by many cups of coffee!
The content on pensiontimes.co.uk is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial advisor. Any references to products, offers, rates and services from third parties advertised are served by those third parties and are subject to change. We may have financial relationships with some of the companies mentioned on this website. We strive to write accurate and genuine reviews and articles, and all views and opinions expressed are solely those of the authors