Crooks may have defrauded the UK tax credit system out of millions after exploiting a lack of safeguards in an internet site designed to service claimants.
HM Revenue & Customs shut down its tax credit portal website at the start of December after uncovering an attempt to defraud the system using the identities of Department of Work and Pensions (DWP) staff.
Initially it was thought that up to 1,500 job centre workers might have had personal information stolen. Now it is feared that up to 13,000 job centre staff might have been exposed to attack, with some reporting fraudulent claims made in their name. Fraudsters are reckoned to have secured the National Insurance numbers, names and dates of birth of thousands of job centre staff working in London, Glasgow, Lancashire and Pembrokeshire.
The information obtained was enough to make fraudulent tax credit claims redirected upon false addresses and accounts controlled by crooks. False claims of up to £1,000 a year appear to have been siphoned into fraudsters' bank accounts, PCS spokesman Alex Flynn told The Independent. "Some people have had shadow bank accounts set up and their money diverted to that account. Other people have had their accounts hijacked," he said.
HM Revenue & Customs said "a criminal investigation" had begun into the fraudsters' use of the DWP staffers identities. The PCS trade union is seeking information about the scale of the fraud.
An anonymous job centre employee told the BBC that nine in ten staffers in his office had been affected. "I went to work on Tuesday. I called the helpline. I was on the phone for 15 minutes and eventually was told that a claim had been made in my name. My greatest worry is that if these people have got our identity details they can apply for loans, open up bank accounts and two or three years down the line that's your credit rating destroyed." (One bright spot is that afected staff can get through to the helpline at all.
This is not the first IT-related crisis to hit the tax credit system, which was established in its present form two years ago as a means to pay the new working tax credits and child tax credits. EDS was fired by the revenue after the system it put in place degenerated into chaos, with families being over-paid credits, only to be hit with big claw-back demands from the department. Last October, the National Audit Office claimed in October estimated that mistakes by claimants - along with fraud - had resulted in over payments of £460m. ®