The Department for Work and Pensions (DWP) is facing criticism over new powers that allow staff to compel banks to hand over financial details of benefits claimants, with experts warning that innocent people could be unfairly penalised.
Targeted Benefits
The crackdown initially targets three benefits: Employment and Support Allowance (ESA), Pension Credit, and Universal Credit. Under the Public Authorities (Fraud, Error and Recovery) Act 2025, the DWP can require banks and other financial institutions to provide information to verify claimants’ eligibility and entitlement.
Expert Concerns
Stuart Morris, chief technology officer at compliance technology provider SmartSearch, said: “There is a risk that some claimants could feel anxious about the introduction of these powers, even when they have provided accurate information, because any system involving increased monitoring or automated checks can create concern if people don't fully understand how decisions are made.”
He added: “Research shows that automated systems can flag legitimate cases as suspicious if they're not properly calibrated. The challenge for the DWP is ensuring their systems are accurate enough to catch fraud while minimising incorrect rejections of genuine claimants.”
Transparency and Trust
The powers have proved controversial. The Public Accounts Committee earlier warned that the DWP has not fully outlined how it will use its powers in a way that supports public trust. It urged the government to be transparent about how often the powers are used and their impact.
Morris emphasised: “Claimants should know what information is being checked, why it's being checked, and what safeguards are in place if errors occur. Independent oversight, fast appeals processes, and the use of multiple trusted data sources can all help minimise false positives and prevent innocent people from being unfairly penalised.”
Sir Geoffrey Clifton-Brown, chair of the committee, stated: “Make no mistake, the DWP’s new powers to reach further into citizens’ lives are significant.”
Privacy Warnings
Privacy campaigning organisation Big Brother Watch has warned that the new powers threaten to create a “second-tier justice system for people on the poverty line.” It said the measures could “undermine the presumption of innocence; result in serious mistakes risking the freedoms and funds of our country’s elderly, disabled and poor; and turn Britain’s once-fair welfare system into a digital surveillance system.”
