Cifas research reveals false housing benefit claims third most prevalent fraud in UK
9 September 2019
- Single Person Discount fraud costing local authorities nearly £16m a year
- 1 in 7 people in London consider falsely claiming a Single Person Discount as ‘reasonable’
Recent research carried out by Cifas, the UK’s leading fraud prevention service, has revealed that falsely claiming Single Person Discount is the third most prevalent type of fraudulent activity carried out by British adults.
Single Person Discount is where a person claims to live in a single-person household in order to receive a discount from their local authority. In the 2017/18 financial year, detected single person discount fraud was valued at £15.8m - money that could have used to support other services and individuals within the community.
The research, carried out in conjunction with WPI Economics, also showed that adults in London were twice as likely to see falsely claiming a Single Person Discount on Council Tax as reasonable (14%), as opposed to respondents in the East Midlands, West Midlands, or South East (7% in each).
These figures are being used as part of the Cifas ‘Faces of Fraud’ campaign, which aims to challenge those seemingly harmless behaviours that are in fact, illegal.
To combat instances of Single Person Discount, Harrow Council has collaborated with Datatank to identify fraudulent and erroneous applications for Single Person Discount, which has helped it save an estimated £3.6m in revenue. Harrow Council now has the lowest incidence of Single Person Discount.
Fern Silverio, Head of Service - Collections & Housing Benefits for Harrow Council, said: ‘Like other Councils, Harrow is under pressure to maximise its income, particularly in the face of recent funding cuts. Our partnership with Databank has helped us maximise our returns, through eliminating the loss of revenue we would have experienced otherwise. It has helped us keep fraudsters on their toes, at the same as future-proofing our own validation techniques.’
In addition to Single Person Discount, unlawful subletting also remains a key issue for local authorities. According to the CIPFA Fraud and Corruption Tracker Summary Report 2018, local authorities estimate that over £216m of housing fraud occurred in the 2017/18 financial year, and this includes fraud on right to buy and unlawful subletting.
Unlawful subletting occurs when individuals let out their property without the permission of the landlord, meaning that in times of high demand for social housing, those in need may be denied the housing they require. Unlawful subletting is a criminal offence in the UK and can lead to criminal prosecution and the loss of the individual’s home.1
Kevin Campbell, deputy head of Internal Audit and Anti Fraud from Waltham Forest Local Authority, said: ‘Council housing is in huge demand, and when a tenant’s circumstances change - for example, where they may have married and moved in with a partner - a council property is vulnerable to subletting. Council tenants do not want to relinquish their tenancies, as they are aware they may never obtain a council property again. Due to extremely high private rental charges in the area, by subletting a council property at similar market rate as privately-owned properties the council tenant will make a huge profit, as council property rents are more affordable.
‘Subletting has a huge impact on the Borough and local community, as the Council is unable to offer these properties to people in genuine need.’
Mike Haley, Chief Executive Officer of Cifas, said: ‘Unlawful subletting and fraudulent housing claims put huge financial pressure on local authorities and, more importantly, it means that families are missing out on the opportunity of a much-needed home.
‘The consequences of this type of fraud are very serious indeed, and could result in a criminal conviction and a prison sentence. I would urge anyone thinking of falsely claiming housing benefit to consider the real impact this can have on their future as well as that of the community at large.’
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Notes to editors
The Cifas report ‘Tackling first party fraud’ in conjunction with WPI Economics is available here.
Cifas exists to prevent fraud and financial crime. We are an independent, not-for-profit membership organisation that protects businesses and individuals through effective and secure data and intelligence sharing between the private, public and third sectors. In 2017, Cifas member organisations prevented over £1.3 billion of fraud losses.
Cifas data is included in the Office of National Statistics England and Wales Crime Statistics of police recorded crime and works alongside law enforcement agencies in tackling fraud. Cifas also offers Protective Registration for individuals whose identities are at risk of being used fraudulently, for instance after a burglary. We also run a scheme called Protecting the Vulnerable, offered free of charge to local authorities to protect those under the care of Court Deputies who are unable to access financial products and whose identities may be at risk.
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