Credit reports to become more prominent in catching benefit cheats

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8th January 2011

Many of us have become frighteningly familiar with our credit reports in the midst of the economic downturn, as a bad credit history means it can be difficult to establish working relationships with lenders. However, the Coalition Government is now finding a new way for credit reports to be used – with the referencing agencies that supply them being asked to help in the search for benefit thieves which are wrongly claiming money from the state.

Interestingly, credit reports are already extensively used by local authorities in order to try and streamline the process for genuine payments which are made to benefits claimants – ensuring that all of the information is correct before transactions begin.

Other ways in which credit reports are currently used is to ensure that people aren’t wrongly taking advantage of the relief given to those who are living on their own, with averages showing that single people pay far more in taxes and expenses than those who are in a marriage or a partnership. Council tax is one such expense which is discounted for those living alone, and credit checks through the main three referencing agencies have been verifying that those who claim to be living alone actually are. In addition, there can be those who won’t declare assets that they already have, despite opening savings accounts which can hold thousands of pounds which the Government don’t know about. Credit referencing agencies, which record all applications and bank accounts which are open, can assess a person’s financial situation more honestly in some situations if the need arises.

Another way in which many people are trying to gain more benefits than they are entitled to is through identity theft – but the error can come when numerous names are used through one address. These data combinations can be double-checked with any discrepancies prompting an investigation into why information supplied is not correct. A lot of the time, the information which is used during the benefits process from credit reports is rather restricted. The main aim of the policy outlined is for more detailed data about suspects to be called upon should the need arise, with any findings that cause concern being used as evidence.

Credit agencies are very anxious to ensure that there are no breaches of privacy made, and that consumer confidence in the services that they provide doesn’t falter because of the involvement which Equifax, Experian and CallCredit have with their customers. Because of this, the referencing companies have reiterated collectively that authorities who want more information need to justify why it should be released.

Some credit report companies have also come under fire by newspapers because of how their help could be rewarded on performance or commission. However, the Government and the Prime Minister are clearly enthusiastic to defend their position because of the advantages which investing in benefit fraud prevention can have. With well over £1.5 billion being dedicated each year to benefit cheats in a time of cuts, it could be said that the cost of tracking fraudsters down is a drop in the ocean comparatively.

Posted in Credit rating

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