Banks to ‘snoop’ on pensioners under new fraud bill sparking privacy concerns
Banks will be granted powers to snoop on pensioners’ accounts and share data with the government as part of a huge fraud crackdown.
The accounts of people claiming benefits such as Pension Credit will be closely watched for fraud.
It comes as part of a new Public Authorities (Fraud, Error and Recovery) Bill, which is set to return to the House of Lords next week.
The legislation will force banks to flag any suspicious activity to the Department for Work and Pensions (DWP).
And it is hoped the move will help save £9.6billion by 2030.
Financial institutions will have to share data with the DWP and not be allowed to tell their customers, according to a report first published in The Telegraph.
In cases of fraud or error, ministers will be able to request for the money to be paid back.
Under current rules, banks must report suspected fraudulent activity, such as money laundering, to the National Crime Agency.
Lenders are also not responsible for keeping an eye on benefit fraud or overpayments.
It is worth noting that DWP can’t actually access people’s bank accounts or any information on how claimants spend their money.
The legislation will require banks to share limited information with DWP to help identify incorrect benefit payments.
This information sharing happens without banks or DWP suspecting anyone of being at fault.
Financial institutions are specifically prohibited from sharing transactional information with DWP, and these rules will stay in place.
A DWP spokesperson told The Sun: “The Fraud Bill is set to save £1.5billion over the next five years, which together with wider reforms will save £9.6billion by 2030, according to OBR estimates.
“It has numerous safeguards in place and DWP will not have access to benefit claimants’ bank accounts.”
The DWP has previously said the new legislation will be the "biggest fraud crackdown in a generation".
Deputy Editor
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