DWP Can Now Spy on Your Bank Account – Here’s What You Need to Know

The UK government’s Department for Work and Pensions (DWP) is under scrutiny for proposed new laws that could allow authorities to access bank account data in an effort to prevent benefit fraud. The Labour government’s Fraud, Error, and Debt Bill is moving through Parliament and is expected to become law later this year. While the bill aims to tighten regulations and reduce fraud, concerns have been raised about potential privacy violations.

What Is the Fraud, Error, and Debt Bill?

The Fraud, Error, and Debt Bill is a key part of the government’s strategy to crack down on benefit fraud. It revives a previous plan that was put on hold due to the general election. The bill will require banks to comply with DWP requests for data on individuals suspected of receiving benefits they are not entitled to. Labour claims that the bill, along with other anti-fraud measures, will help recover £1.5 billion over the next five years. By 2030, the government expects to save £8.6 billion through these measures.

Why Are Privacy Concerns Being Raised?

Critics argue that the bill does not just target benefit claimants but could also affect anyone who interacts with them financially. Jasleen Chaggar, a legal and policy officer at Big Brother Watch, warned that the legislation could enable mass surveillance of “everyone’s accounts, including yours and mine.” She pointed out that even those who receive benefits on behalf of someone else—such as parents, guardians, landlords, or carers—might also have their financial data monitored. Helena Wood, director of public policy at Cifas, described the powers as “very new and incredibly intrusive,” warning that they could lead to widespread data collection beyond their intended purpose. She compared the approach to a “phishing-style power” used in criminal investigations.

How Will the Bill Affect Benefit Claimants?

The bill introduces ‘eligibility verification powers,’ which allow the DWP to request financial data from banks to confirm whether someone meets the criteria for receiving benefits. For example:

• To qualify for Universal Credit, a person must have less than £16,000 in savings (with few exceptions).
• The focus will be on Universal Credit, Pension Credit, and Employment and Support Allowance, as these have the highest rates of incorrect payments.

The government argues that these checks will ensure that people receiving benefits are genuinely eligible and that public funds are being used correctly.

Government Response to Criticism

Despite concerns, the DWP has defended the bill. A spokesperson stated that the new powers will not grant full access to claimants’ bank accounts but will allow limited data sharing to identify fraud. The DWP also promised to introduce safeguarding measures to protect vulnerable individuals. Staff will receive training on how to use the new powers responsibly, and oversight mechanisms will be put in place.

MPs Debate the Need for a Code of Practice

Some MPs and experts have called for a code of practice to clarify how the new powers will be used. However, DWP Minister Andrew Western argued that such a code cannot be created before the bill is finalized. Conservative MP Mike Wood compared the approach to “King Henry VIII” powers, where ministers can modify laws without full parliamentary approval, but this claim was dismissed by the government. While the bill aims to reduce fraud and save taxpayer money, privacy advocates worry that it could set a dangerous precedent for government surveillance. The balance between fraud prevention and protecting citizens’ rights will be a key issue as the legislation progresses. SOURCE

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