Feeds

£15m+ lost in tax credit fraud

Government payroll records used to steal IDs

Next gen security for virtualised datacentres

HM Revenue & Customs estimates crooks have made off with at least £15m after defrauding the tax credit system by making false claims in the name of job centre workers. The estimate came when HM Revenue & Customs executive director David Varney appeared before the House of Commons Public Accounts Committee on Thursday to answers questions from MPs over an attack on the revenue which is far worse than first suspected.

HM Revenue & Customs shut down its tax credit portal website at the start of December after uncovering an attempt to defraud the system using the identities of Department of Work and Pensions (DWP) staff. Varney said the fraud against the tax credit systems was enabled by illicit access to government payroll records. This illegal access was likely facilitated by corrupt insiders.

Initially it was thought that up to 1,500 job centre workers might have had personal information stolen. Now it is feared that up to 13,000 job centre staff might have been exposed to attack. Fraudsters are reckoned to have secured the National Insurance numbers, names and dates of birth of thousands of job centre staff working in London, Glasgow, Lancashire and Pembrokeshire.

The information obtained was enough to make fraudulent tax credit claims redirected to false addresses and accounts controlled by crooks. False claims of up to £1,000 a year appear to have been siphoned into fraudsters' bank accounts. Crooks took advantage of a lack of comprehensive checks of online applications to make an easy killing. Varney told MPS that losses identified so far come to £15m, a figure that's likely to rise since the revenue is only at an early stage of investigating the scope of the fraud. A criminal investigation has begun into the case.

It's not the first IT-related crisis to hit the tax credit system, which was established in its present form two years ago as a means to pay supplements to families on low incomes. EDS was fired by the revenue after the system it put in place degenerated into chaos, with families being over-paid credits, only to be hit with big claw-back demands from the government department. The National Audit Office claimed in October that mistakes by claimants - along with fraud - had resulted in over payments of £460m. ®

The essential guide to IT transformation

More from The Register

next story
Goog says patch⁵⁰ your Chrome
64-bit browser loads cat vids FIFTEEN PERCENT faster!
Chinese hackers spied on investigators of Flight MH370 - report
Classified data on flight's disappearance pinched
NIST to sysadmins: clean up your SSH mess
Too many keys, too badly managed
Attack flogged through shiny-clicky social media buttons
66,000 users popped by malicious Flash fudging add-on
New twist as rogue antivirus enters death throes
That's not the website you're looking for
ISIS terror fanatics invade Diaspora after Twitter blockade
Nothing we can do to stop them, says decentralized network
prev story

Whitepapers

A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.