DWP Plans for Bank Account Surveillance Likely to Breach Privacy Law and Could Amount to "Unlawful Discrimination”

Under current rules, DWP can only request details of a bank account holder’s transactions if there are reasonable grounds to suspect them of fraud.

But using algorithms to trawl a large number of accounts at once (on the presumption of guilty until proven innocent) removes our right to privacy, and the chances of false positive matches for fraud or error are incredibly high.

The civil liberties campaign organisation Big Brother Watch (BBW) has already warned that the potential for “expansive surveillance, high rates of error, and disproportionate impact on people in vulnerable positions is huge”.

For example, there are now concerns that the new powers would also see Disabled people with care and support needs wrongly trigger fraud indicators, have their benefits suspended, and be forced into intrusive interviews by DWP fraud investigators.

Many Disabled people set up bank accounts to pay for their social care, as these accounts hold capital that might be misidentified as fraudulent.

However, new legal advice given to BBW, points out that the Bill will not only give the DWP powers to look into and further investigate bank accounts in cases of fraud but also error – such as when the claimant has made a mistake or the DWP itself has made a mistake.

The barristers who produced the legal advice, Dan Squires KC and Aidan Wills of Matrix Chambers, said: “It is clear that the purpose of the new proposed powers is to carry out monitoring of bank accounts where there are no ‘reasonable grounds’ for believing a particular individual has engaged in benefit fraud or has made any mistake in claiming benefits.”

“There are real doubts about whether the exercise of the powers would be proportionate if they were used for detecting mistakes in claims made by people in receipt of benefits or the DWP’s own errors in payment of benefits.”

Their legal advice also raises questions whether proper safeguards are in place to protect people, as in the “absence of these safeguards, it is difficult to see how the exercise of this power could ever be in accordance with the law”: “It is at least arguable that disparate impacts on groups with the above mentioned characteristics, many of whom are disadvantaged or vulnerable, would be difficult to justify for the purpose of identifying mistakes made by benefits recipients and, even more so, the DWP’s own errors.”

The fraud rate for Personal Independence Payment is just 0.2%.

Mikey Erhardt, Policy Officer at DR UK, said: “These powers are a sledgehammer to crack the tiniest nut. These new powers would see disabled people deprived of the presumption of innocence, adding to the victimisation we already face in a punitive welfare system that often seeks to sanction people into work.”

You can sign the Big Brother Watch petition against the Bill here.

A briefing on how the Bill threatens Disabled people is available to download at the bottom of this page (produced by DR UK, the  National Survivor User Network and Greater Manchester Coalition of Disabled People.

Note: Key Points at a Glance:

1. These powers are disproportionate.
2. They could be in breach Article 8 of the European Convention on Human Rights (the Right to Privacy)
3. Disabled people already face persecution from the DWP, the fraud rate for disability benefits is only 0.2%, these powers are a sledgehammer to crack the tiniest nut.
4. Many psychiatric conditions will be made worse by the knowledge of being spied upon.
5. Mass trawling of bank accounts is a huge imposition upon banks and will create many false positives and security risks to anyone with a bank account, with innocent people losing payments that are essential to buying food, medication, and paying for housing.
6. The proposals were introduced in an unusual way evading significant scrutiny in the Commons, they are draconian and poorly evidenced.

Note: Key statistics

1. 6.3 million Disabled people, claiming a disability benefit of some kind, could be affected by this, as well as pensioners.
2. This approach will recover less than 3% of the estimated annual loss to fraud and error.
3. If scanning over 20 million bank accounts, even a remarkably low error rate of 1% would lead to 200,000 people’s accounts being wrongly flagged to the DWP.
4. Estimated personal independence payment (PIP) fraud was just 0.2 percent of PIP spending in 2022-23.
5. The £40 million lost to PIP fraud compares with an estimated £60 million in underpayments of PIP caused by DWP error in 2022-23.

Nearly £19 billion in income-related benefits remains unclaimed annually.