STRUGGLING families are being warned to beware a new scam that sees fraudsters take out Universal Credit loans in their names, which stops their benefits.
Police forces, councils and Citizens Advice bureaus across the country are warning people to watch out for fraudsters claiming to offer low cost Government loans.
PA:Press Association Police forces, councils and charities have been warning of a new Universal Credit scam
It comes as The Sun reported only last week how one mum lost her £780 a month benefits after a fake loan firm signed her up for Universal Credit and stole her cash.
The scam sees fraudsters take out a so-called Universal Credit budgeting loan in someone else’s name.
But these budgeting loans have to be repaid and in the meantime existing benefit payments are stopped with Universal Credit payments not kicking in for five weeks.
It can leave families without any cash or in a worse position under Universal Credit than they were under their former benefits – particularly as the fraudsters are taking upfront payments for these loans.
The Sun wants to Make Universal Credit WorkUNIVERSAL Credit replaces six benefits with a single monthly payment.One million people are already receiving it and by the time the system is fully rolled out in 2023, nearly 7 million will be on it.
But there are big problems with the flagship new system – it takes 5 weeks to get the first payment and it could leave some families worse off by thousands of pounds a year.
And while working families can claim back up to 85 per cent of their childcare costs, they must find the money to pay for childcare upfront – we’ve heard of families waiting up to 6 months for the money.
Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.
It’s time to Make Universal Credit work. We want the Government to:
Get paid faster: The Government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop 7 million from being pushed into debt.
Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from 63p to 50p, helping at least 4 million families.
Don’t get punished for having a family: Parents should get the 85 per cent of the money they can claim for childcare upfront instead of being paid in arrears.
Together, these changes will help Make Universal Credit Work.
Join our Universal Credit Facebook group or email UniversalCredit@the-sun.co.uk to share your story.
Salford City Council in Manchester told The Sun it has recently helped three people who have been stung by this scam and Greater Manchester Police warns that it is “particularly prevalent” in the North West of England.
In one case seen by the council a single mum was left worse off on Universal Credit and pushed into rent arrears.
While in another instance the victim said they’d been approached by someone claiming to work for the Department for Work and Pensions (DWP).
Greater Manchester Police’s Altrincham Twitter account has tweeted the following warning: “Trading Standards has been made aware of a scam being operated across the UK, and appears to be particularly prevalent in the North West of England.
“Residents are being contacted by scammers claiming to be able to offer them low cost Government loans.
“In actual fact, the fraudster will use their victim’s personal details to apply for Universal Credit, then request a substantial advance payment, a cut of which they will take for themselves.
Greater Manchester Police has issued a warning about Universal Credit scams
“The result is that the victim’s current benefits will be stopped and replaced by Universal Credit.
“They will then be required to pay back the so called loan in full from future Universal Credit payments.
“In addition their personal information will also have been compromised and the scammers will have access to their benefit account and banking information.
“The scam is targeted at anyone of working age. Never give personal or financial information to anyone you do not know and report scams to Action Fraud or call 0300 123 2040.”
But it’s not just Greater Manchester Police that’s cautioned people to watch out for the scam.
Citizens Advice in Brighton and Hove in East Sussex has tweeted to say it’s hearing reports “around the country” of the scam, with some fraudsters even turning up on people’s doorsteps.
How to protect yourself against fraudHERE’S how to protect yourself from fraud:
Always shred or destroy documents that contain personal information before throwing them away.
Never respond to cold calls or emails asking for account details, PINs, passwords or personal information.
Do not give too much away on networking websites. For example, pets’ names or children’s names that could be used as passwords.
Register to vote at your current address. If you do not, thieves could use your previous address details to open new credit accounts, and run up debts in your name.
Monitor your post regularly so you know when to expect important documents – and when to act if they do not arrive.
Have your post redirected if you move house.
Always use secure, unique passwords for as many online accounts as possible, and ideally all of them.
Read all bank and card statements regularly to check for suspicious transactions.
If you think you’ve been a victim of fraud contact your bank or card provider immediately and report it to Action Fraud.
It wrote: “Around the country we’re hearing about this kind of scam – where your personal details are used to sign up for Universal Credit and take out an advanced payment that you’re left to pay back.
“Always double check who you’re giving your details to.
“These can be especially damaging if you already have benefits that are stopped by the new claim – there may be no way back to the old benefits that may well have been worth more to you.
“We’ve had reports of people on the doorstep offering loans, or claiming to be from the DWP ‘updating’ your account, even people in pubs offering to help you get an online loan for a per cent fee.
“People don’t realise what has actually happened until it’s too late.”
Citizens Advice in Brighton and Hove has been warning about the scam
Knowsley Council in Merseywide has also tweeted to say it’s “urging residents to be extra vigilant” following the reports.
The Sun launched its Make Universal Credit Work campaign where we have highlighted the problems with the new system.
We’ve called for the five-week wait for cash to be reduced to two and asked for childcare funding to be paid upfront to parents.
We also want people to keep more of what they earn by lowering the taper rate and increasing the work allowance.
Knowsley Council is also warning residents to be on their guard
The Department for Work and Pensions (DWP) says it expects Universal Credit to reduce losses to fraud, error and overpayments by £1billion when it is fully rolled out.
A DWP spokesperson said: “Identity fraud is a serious crime and anyone who believes they have been targeted should get in touch with Action Fraud on 0300 123 2040.
“We remain vigilant to all forms of fraud and investigate, and prosecute, where appropriate. We are constantly refining our processes to ensure Universal Credit remains both accessible and secure, with those who need support getting it.”
The Sun has contacted Trading Standards for a response and we’ll update this story if we get one.
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A leaked memo “shows the Government is launching a PR campaign to defend Universal Credit” following horror stories from claimants.
Charities have told MPs, for example, how Universal Credit is forcing more women into sex work for just £5 to survive.
They’ve also warned that Universal Credit errors are pushing people in to debt.
Universal Credit bosses accused of holding 10,000 people to ransom after they lost money by switching benefits
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